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Article

Energy-Saving Potential and an Economic Feasibility Analysis for an Arctic Route between Shanghai and Rotterdam: Case Study from China’s Largest Container Sea Freight Operator

by 1,2,*, 3 and 1
1
College of Transport and Communications, Shanghai Maritime University, Shanghai 201306, China
2
Institute of Transportation Studies, University of California Davis, Davis, CA 95616, USA
3
Institute of Logistics Science & Engineering, Shanghai Maritime University, Shanghai 201306, China
*
Author to whom correspondence should be addressed.
Sustainability 2018, 10(4), 921; https://doi.org/10.3390/su10040921
Received: 12 February 2018 / Revised: 14 March 2018 / Accepted: 20 March 2018 / Published: 22 March 2018
(This article belongs to the Section Sustainable Transportation)
Global warming has significantly reduced summer ice coverage in the Arctic region, providing long-awaited opportunities for the shipping industry to open new routes through a region known for its harsh navigational conditions. If a shortcut between Asia and Europe via the Northern Sea Route (NSR) is adopted, significant energy saving and pollution reduction are possible compared with conventional southern routes. However, opinions in literature differ regarding this shortcut’s economic viability. We present an analysis from the perspective of COSCO, China’s largest container sea freight operator. We perform a cost–benefit analysis under several scenarios considering the following current realities: (1) declining oil prices not seen for decades, even lower than the lowest prices assumed in previous studies; (2) declining Russian NSR tariff as an effort to attract shipping traffic; (3) possible emission control areas along a northern route may require much cleaner energy and thus impact costs not studied in previous models; and (4) the capital cost difference between a hired and a self-owned vessel. Classical case studies of shipping routes between Shanghai and Rotterdam are adopted for comparison. We explain how different factors impact the shipping costs and to what extent can the NSR be economically viable. Occasional usage of NSR (e.g., one time transit) is unlikely to be more profitable given the higher unit transportation cost, but the route could be economically competitive in terms of the total profits earned for continuous usage. A more aggressive scenario which requires ships on the NSR to switch to much cleaner fuel would erode this route’s competitiveness, but extra environmental benefits should be taken into consideration if future carbon emission trading schemes include the shipping industry. View Full-Text
Keywords: Arctic shipping; Northern Sea Route; cost–benefit analysis; energy saving Arctic shipping; Northern Sea Route; cost–benefit analysis; energy saving
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MDPI and ACS Style

Wan, Z.; Ge, J.; Chen, J. Energy-Saving Potential and an Economic Feasibility Analysis for an Arctic Route between Shanghai and Rotterdam: Case Study from China’s Largest Container Sea Freight Operator. Sustainability 2018, 10, 921. https://doi.org/10.3390/su10040921

AMA Style

Wan Z, Ge J, Chen J. Energy-Saving Potential and an Economic Feasibility Analysis for an Arctic Route between Shanghai and Rotterdam: Case Study from China’s Largest Container Sea Freight Operator. Sustainability. 2018; 10(4):921. https://doi.org/10.3390/su10040921

Chicago/Turabian Style

Wan, Zheng, Jiawei Ge, and Jihong Chen. 2018. "Energy-Saving Potential and an Economic Feasibility Analysis for an Arctic Route between Shanghai and Rotterdam: Case Study from China’s Largest Container Sea Freight Operator" Sustainability 10, no. 4: 921. https://doi.org/10.3390/su10040921

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