Arctic Express Route Now Being Advertised

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One week ago I wrote an article on the Arctic Express which we commonly know as the Northern Sea Route which is the shipping route linking China with Europe using the sea above Russia. The container vessel Istanbul Bridge was the first vessel using the route under the new Russia Chinese partnership. This was the opening event of the Trans Arctic commercial route between China and Europe.

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Sealegend another global shipping line had it's very first container ship using the Arctic Express booked out in less than 24 hours.

This route is now being officially promoted by various shipping brokers with the above advert highlighting the route offering 50% less carbon emissions. The delivery time is just 18 days sailing servicing Felixstowe, Rotterdam, Hamburg and Gdansk. This is actually quite important when we consider in just over 2 months time the Carbon Border Adjustment Mechanism (CBAM) goes live across the EU. Chinese goods are known to have a higher carbon content so any savings on the border tax will be helpful on the end price.

The CAX highlighting 18 days is the container availability for this route so you are guaranteed a container available within an 18 day window. This is actually quite good for this time of year as I have known this to be at over 50 days in the past.

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Looking at the global vessel data there are a few tankers and container ships on the Arctic Express but no numbers of significance yet. Over the coming months we should see more yellow which signifies container ship activity. All it takes is one or two before it starts to gather momentum. The Istanbul Bridge is already on it's way back to China and was last seen collecting containers in Gdansk, Poland. The importance of this is this vessel would have made a return trip between China and Europe offloading and loading before any other vessel had reached Europe travelling by the Suez Canal. Twice the profits with half the expense over the same time period.

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I was wondering what forced the Chinese Russian agreement on this Arctic Express trade route and it was Poland shutting down the Poland Belarus border for 2 weeks. This is important for Chinese Europe trade as the rail link goes across this border crossing. Russia was conducting military exercises when a drone "accidentally" landed on Polish soil. You do wonder if this was done on purpose giving Putin the excuse to push China into using the Arctic Express.

Also in the news is the Port of Arkhangelsk in Russia and the closest port to Europe which is going to become a deep water port replicating Tianjin and Ningbo-Zhoushan in China. One of Russia's oldest ports will become a smart port capable of handling 1 million containers per year which is a 5 x increase on current volume. This is expected to be ready and operational by 2030 and will become the main hub for the Artic Express. The port will require an extra 65 vessels which will boost the shipyards in the area fueling the growth in the entire region.

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Putin needs the Arctic Express open all year round and with Chines input this will happen and expect it to be open this winter or why else would they announce this new route. The Arctic Express is seen as anti West as the West has no control over this route and why they are so anti this. Over the next 2 years we shall see trade volumes increase from a few million tons per year to hundreds of millions of tons transiting this route. China and Russia will dominate world shipping controlling what will become the most important shipping route in the world.

Posted Using INLEO