Opinions

Northern Sea Route Replaces Suez?

 

Due to the escalation in the conflict in the Middle East, in Russia traditional debates about the Northern Sea Route's (NSR) potential to substitute for the Suez Canal have arised again. There are valid reasons for this discourse, as Suez Canal traffic has dwindled due to Houthi attacks on vessels in the Red Sea.

It is crucial to note that the bulk of freight traffic has already been redirected through the Cape of Good Hope. In fact, the volume of redirected cargo surpassed that of the Suez and Panama Canals combined. However, at present, the NSR due to ice conditions and amount of icebreakers is unable to compete fully with this alternative.

Russia Still Gains

Despite not making significant strides in maritime transport, Russia has found itself among the beneficiaries of Middle Eastern conflicts, this time through railway transportation. According to RailGate Europe, as reported by FT, demand for container transit through Russia has risen by 25-35% this year, with DHL citing an even higher figure of 40%.

Constraints on Transit Railways

The observed surge in demand is evidently constrained by limitations on the Eastern Polygon of Russian Railways (RZD). Recent trends indicate a shift in transport volumes towards coal and petroleum products at the expense of containers. Ground transportation providers have yet to fully capitalize on the emerging opportunities. However, it is anticipated that the situation will improve for container shipments with the launch of the Murmansk Transport Hub by the year's end.

The material is based on posts by “Kapitan Arktika” and “SMP” TG-Channels

 
13.03.2024