Tricky issues could put Arctic sea route cheer on ice

This trend was highlighted by Ince & Co partner Rory MacFarlane at China Maritime 2014 at a session held in conjunction with the Young Professionals In Shipping Network HK afternoon seminar series last week in Hong Kong.

The numbers are certainly impressive. The number of non-Russian vessels transiting the route has risen from just two in 2009 to 71 last year, although this is a tiny fraction of 77,973 vessel transits in the Malacca Straits last year, the main East - West trade route. However, with the rise in traffic comes attendant risks.

While all insurers agree that claims arising from an incident in the Arctic will be more expensive, none are willing to be the first to quantify it. At another session, Catlin’s Timothy Lee had ventured the opinion that from their point of view, the Northern Sea route is “not really better” than the Suez Canal route.

While the Arctic route will avoid the piracy risks of the latter voyage, there are the higher environmental risks to balance that off, he noted. He pointed out in particular the thorny problem that no polar code currently exists, while very few ships currently also have an ice-class rating that will qualify them to make the trip.

MacFarlane concluded that while the risks and financial implications are greater on the Northern Sea route, they are not necessarily different from that of a normal passage.

He, however, pointed out some of the less obvious potential issues which might arise. Firstly, charter hire risks mount rapidly. For example, if a vessel goes off-hire or has its charter party terminated due to breakdown or some other issue the Arctic region’s isolation makes the situation become much more serious. The logistics of getting parts and repair crew out to the area will be vastly different from other normal incidents. And at the end of it, finding a re-hire will be next to impossible.

Another major potential issue MacFarlane highlighted is the danger of routing conflicts. The rapidly changing and harsh weather conditions of the region heighten the risk of navigational orders conflicting with employment orders. This can be a problem at the best of times as ship owners and crew come under increasing commercial pressure but with the wild weather in the polar regions, possibly even being exacerbated by the very global warming and climate change that has made the passage an option, the potential for dispute mounts.

Finally, the nature of ice-bound sailing also adds navigational risks. Transits into most of the world’s major ports have become quite straightforward with the advent of modern navigational aids. But in the Arctic, where the ice melts and re-freezes every year, the approaches to ports and navigational hazards must necessarily be non-uniform, depending basically on the thickness of the ice at any particular point and the ability of the ice-breakers to clear a path through it. As a result, mariners cannot take for granted the tried and tested approach channels that they are used to everywhere else around the world and the risks of hitting an uncharted obstruction or running aground mount as well.

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