5 September 2024
Key Conclusions
The Northern Sea Route is the future of global logistics
“Looking at this map, you can see 10 international
corridors that are constantly competing: North–South, Murmansk, and the ports
of the Persian Gulf. We are actively engaging with our foreign partners on
these routes. However, access to the open seas is through the Northern Sea
Route – this is the future of global logistics. Our task is to make it
convenient, reliable, and accessible because it will, by all metrics, be
competitive with other maritime routes,” Igor Levitin, Adviser to the President
of the Russian Federation, Special Representative of the President for
International Transport Cooperation, and Deputy Chairman of the Marine Board of
the Russian Federation.
“We are all essentially bound to see this route become
a primary reality, not merely an alternative. The global market is growing,
demand is increasing, and the volume of freight shipping is expanding as routes
are lengthened. <…> International container freight indices have more
than doubled in recent years, making the Northern Sea Route a far more
attractive international corridor. In this context, Russia’s role in the global
economy is immense. For us, these are not merely economic routes; this is a
sovereign route that allows us and our allies to transport goods from Asia to
Europe,” Gadzhimagomed Guseynov,
First Deputy Minister of the Russian Federation for the Development of the Far
East and the Arctic.
“Our number of NSR participants is increasing, and new
structural decisions and business ventures are emerging, involving countries in
East and Southeast Asia, as well as the Arab world. These joint ventures are
aimed at the development of the NSR, indicating that no sanctions can deter us.
<…> On the contrary, this will lead to further growth and set new records
for the NSR,” Alexey Likhachev, Director
General, State Atomic Energy Corporation ROSATOM.
“Russia is the largest Arctic state and has made remarkable progress in
developing this region. <…> We highly
commend the efforts directed towards the development of the Northern Sea Route,
which will play a significant role in the 21st century,” Brijinder
S. Sodhi, Naval Attache, Embassy of the Republic of India to the Russian
Federation.
“What’s most important is that, as Russia invests in the development of the
Northern Sea Route, it is demonstrating its potential to the world. <…> In fact, this route significantly reduces
transport times,” Fan Yusin, Chairman, NewNew Shipping Line.
“What happened in 2021 in the Suez Canal, the traffic jams that occurred
there, provided a critical lesson for the global shipping industry. Risk diversification
is essential, and in this regard, the necessity and advantages of the Northern
Sea Route became increasingly apparent,” Sakiko
Hataya, Research Fellow, Ocean Policy Research Institute, Sasakawa Peace
Foundation.
Development of the Northern Sea Route is in line with Russia’s strategic national
interests
“I would base my argument for the systematic,
long-term, and strategically planned development of the NSR on two fundamental
premises. First, this is Russian territory, part of our geopolitical interests.
I believe older generations will remember the saying frequently used in the
1980s: ‘He who does not feed his army will feed another’s.’ This could be
paraphrased in this context: ‘He who does not develop his territory will find
it developed by another nation.’ This is not open to debate. This is our land,
with its wealth of resources, its defence and security concerns, and our
geopolitical influence. The second premise is that this is the most optimal
route. Yes, it requires certain efforts, but these can be addressed separately.
<…> The international demand for the NSR will only continue to grow. <…>
The sheer volume of restrictions and sanctions currently imposed on Arctic
projects, the companies operating there, and those transporting goods or
providing banking, financial, and insurance support, only highlights the need
for the NSR. <…> We will continue to seek even more opportunities to
develop this region, not only from a technological standpoint but also in terms
of our international partnerships,” Alexey Likhachev, Director General, State Atomic
Energy Corporation ROSATOM.
PROBLEMS
Financial and investment scenarios for the NSR remain unclear
“We are aware of the infrastructure risks and
challenges. The financial and investment scenarios are still not fully clear. I
believe our partners from the People’s Republic of China and India would agree
that we have not yet reached our full potential. Much remains to be done to
make this a truly attractive, safe, and comfortable international transport
route,” Alexey Likhachev, Director
General, State Atomic Energy Corporation ROSATOM.
High cost of icebreaker services
“When we transferred control of the icebreakers to
Rosatom, we understood that the icebreaker tariff should be similar to that of
the Trans-Siberian Railway. An icebreaker provides traction, pulling caravans
of ships. In the future, we need to return to this approach, as our icebreaking
services were once priced very low because the icebreakers were built with
state funds. This is a fundamental issue. The Northern Sea Route will only
succeed when icebreaking services are treated as essential infrastructure. It
is very important,” Igor
Levitin, Advisor to the President of the Russian Federation; Special
Representative of the President of the Russian Federation for International
Cooperation in the Field of Transport.
“In the current financial climate, given the central
bank’s policies, stringent lending restrictions, and conservative fiscal
policies, the financial burden of developing the NSR solely on commercial
principles would be too great for cargo shippers to bear,” Alexey Likhachev, Director
General, State Atomic Energy Corporation ROSATOM.
Solutions
The State must act as a key investor in the NSR
“We need to completely modernize the icebreaker fleet.
Several issues concerning the development of an ice-class cargo fleet remain
unresolved. The economic model for this fleet – potentially comprising up to
100 vessels within the next decade – cannot be entirely funded by the NSR users.
We do not build railways in the country solely through credit, incorporating
all costs into tariffs; otherwise, no one would use them. The state’s role is
to assume infrastructure risks, provide key anchor investments, and manage
risks should events diverge from projected scenarios. Clearly, the state must
be the primary investor. We no longer view the NSR as merely a legal route from
the Vilkitsky Strait to the Bering Strait. It is now a major corridor
stretching from our north-western ports, including Kaliningrad and St.
Petersburg, to our Far Eastern ports, such as Vladivostok and Sakhalin. It is
in these terms that we are developing the new federal project ‘The Greater
Northern Sea Route,’ which I am confident will soon receive government
approval,” Alexey Likhachev, Director
General, State Atomic Energy Corporation ROSATOM.
Development of infrastructure to support the NSR
“The Northern Sea Route is not just about icebreakers;
it is an infrastructure network. I would compare it to a road. A road is not
just a strip of tarmac – it requires maintenance, clearing, and servicing. Similarly,
the NSR is supported by a vast range of services, from satellite constellations
to ground-based infrastructure and safety systems, in addition to the atomic
and icebreaker fleets. This entire system ensures the route can safely
accommodate shipping traffic,” Gadzhimagomed Guseynov, First Deputy Minister of the Russian Federation
for the Development of the Far East and the Arctic.
Improving the safety of shipments on the NSR
“With pride, I can announce that on 15 March 2024, the first Arctic
integrated emergency and rescue centre will be launched in Pevek. <…> We expect that by the third quarter of
2025, a second centre, out of the four planned, will be operational. We still
need to complete facilities in Tiksi and Dixon, along with aviation units.
However, today, four helicopters are already on standby in the Arctic – in
Murmansk, Arkhangelsk, and Pevek. <…> We
can now speak of the export potential of our safety technologies. This is a key
step in fulfilling the President’s directive to position Russia as a reliable
partner in the Arctic region while also creating an export capacity for our
technologies,” Alexander Bondar, Director of the Department of
Educational, Scientific and Technical Activities, Ministry of the Russian
Federation for Civil Defense, Emergency Situations and Disaster Relief.
*This is a translation of material that was originally
generated in Russian using artificial intelligence.
For more information, visit the Roscongress
Foundation’s Information and Analytical System at roscongress.org/en