Arctic route to Europe for ships is being exploredThe Korean government is organizing Arctic Ocean shipping routes to its shipping lines and to test them this summer.
According to Ministry of Ocean and Fisheries and local media reports, the government is talking with Russian authorities to open a commercial route across the Arctic Ocean. The ministry said details will be announced next month.
To reach Amsterdam, ships now cross the Indian Ocean, traverse the Suez Canal and ply the Mediterranean, a journey of about 20,000 kilometers (12,427 miles) from Busan. The Arctic Ocean route would reduce the distance to 13,000 kilometers and the time from 40 to 30 days.
Arctic routes were formerly limited to ice breakers, but global warming has allowed normal commercial vessels to ply them for about four months during the summer.
The plan follows Korea obtaining permanent observer status on the Arctic Council last month, allowing it to actively participate in Arctic-related issues including developing sea routes, environmental protection and scientific research.
From 2011, the Korean government formed a task force that includes officials from the Korea Shipowners’ Association, shipping companies and researchers to explore Arctic Ocean routes. It has been talking with the Russian government to get sailing permission and escorts from ice-breaking vessels.
The ministry said it is also considering offering a discount on port usage for companies signing up for the Arctic routes. Shipping companies have said they are reviewing the logistics of the new route.
“Although we don’t know how much we will gain or lose by operating Arctic Ocean routes, it’s worth trying,” an official from the nation’s top shipping company said. “If there is enough cargo with good rates, who will not try the new route?”
Industry insiders expect bulk carriers transporting energy resources will be the first to use the routes. They speculate container ships would take longer to try them.
Last month, the Samsung Economic Research Institute said that Arctic Ocean route will provide new opportunities for Korea to try to become a center of Northeast Asia’s maritime logistics and it said Busan would be the best port to benefit.
Shipping companies said the most important issue at the moment is to set up a “Shipping Guarantee Fund,” as many firms are struggling with their businesses. The Chairman of the Korea Shipowners’ Association, Lee Yun-jae, who also heads Heung-A Shipping, said a fund must be created within this year to solve liquidity problem of shippers. The situation recently became worse as STX PanOcean, the nation’s largest bulk carrier, has entered court receivership.
“If the government establishes a 2 trillion won [$1.7 billion] fund, shippers will also support it with about 200 billion won,” Lee said at an association meeting Friday.
BY JOO KYUNG-DON [email@example.com]