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15.07.2025
Investment in Connectivity: Arctic Transportation Infrastructure
Introduction
The Arctic’s climate and consequent geopolitical opportunities are on the verge of making it a new frozen playground for future generations. Developing the transportation and logistics infrastructure of the Russian Arctic is a leading factor in economic growth and in exploring this gigantic country’s natural resources. The Northern Sea Route (NSR), a navigation route that is about 5,600 kilometers long, is today the leading importing part of the Arctic transportation complex. In order to promote this route as the most viable transit option, it requires developing several infrastructures and projects such as modernizing and expanding Arctic ports and improving the support fleet to ensure efficient maritime transportation. This work is intended to ensure high-quality freight shipping in Russia’s Arctic waters and to improve maritime navigation security in the harsh polar climate.
This essay considers the advantages this region offers for international trade with an emphasis on the Northern Sea Route (NSR), the North-West Passage (NWP), and the Transpolar Sea Route (TSR), and the problems arising in connec- tion with developing the Russian Arctic. This region, indeed, is ohen criticized for the buildup of military presence and/or for environmental problems. Still, it is worth noting that scientists also point out that the existing sea routes could be
replaced with transpolar ones. The main thing is gauging the degree of impact the Arctic zone’s unique conditions have on its economic activity thereby conse- quently influencing Arctic projects’ capital intensity and, accordingly, their eco- nomic prospects.
ADVANTAGES OF ARCTIC NAVIGATION
The Northern Sea Route (NSR) and its Conditions
The Arctic sea ice has reached the critical threshold where ice-free summers have become a regular phenomenon in the larger area of the Arctic Ocean. NASA’s studies show that years-old ice, the oldest and thickest ice in the region that has traditionally been the main obstacle to navigation, has been disappearing at a faster pace than the newer, thinner ice (Zaikov K.S. et al., 2019). Ice-free periods along the main navigation routes in the Arctic are predicted to increase from about 30 days in 2010 to over 120 days by mid-century (Ibid). Additionally, the distri- bution of the remaining summer ice in the Arctic Ocean is also expected to shih. Studies show that sea ice will remain for the longest time along the northern edges of the Canadian Arctic Archipelago and Greenland, while the Arctic’s central and eastern areas will experience the greatest ice shrinkage, which will further extend the navigation season along the Northern Sea Route.
The longer ice-free period has multiple advantages. It cuts the distance ships have to travel and the time they need to do it in thereby increasing supply chain efficiency; it also increases shelf life of perishables, for instance, food. Additionally, it allows companies and countries to introduce extra slow navigation in an attempt to cut greenhouse gas emissions. Extra slow navigation entails lower average speed, which increases energy efficiency, cuts emissions and fuel spending. Therefore, the Northern Sea Route allows a vessel travelling from Antwerp to Tokyo to reduce its speed thereby cutting fuel spending and emissions, yet this vessel will arrive in its destination port at the same time it would have arrived in had the ship used the Suez Canal (Myllyla, Y. et al., 2016).
Cela va sans dire, clearly, that the advantages held by the Artic navigation routes reduce dependence on such critically important nodes as the Panama Canal, the Strait of Malacca, and the Suez Canal. Since increasingly fewer vessels travel through these vital passages, the countries that control them are losing their influence over the global trade and face falling shipment revenues that tradition- ally fund the maintenance of these “nodes” (Humpert & Raspotnik, 2012).
Economic expediency of Arctic navigation
There are three principal factors defining global maritime shipping: regular- ity, being on time, and scale efficiency, which are currently difficult to achieve in Arctic shipping. Consequently, the Arctic routes’ unpredictable schedules and wildly varying travel times are major obstacles in the way of expanding Arctic
shipping. Most of the world’s cargo ships travel along regular routes known as line shipping. Over 6,000 such vessels, mostly container ships, follow pre-de- termined routes docking in various ports to load and unload goods, thereby con- tributing to developing trade in the countries’ inner regions. Profitable maritime shipping depends on large-scale operations that ensure stable, predictable, and year-round services. In particular, container shipping operators depend on plan- ning their voyages in advance and on ensuring interrupted services. Unlike them, bulk carriers, both for dry goods and non-dry goods, have less predictable sched- ules since their routes depend to a greater degree on changes in the demand for nonvital cargo.
Out of the four types of Arctic voyages (Arctic destination, intra-Arctic, trans-Arctic, and coastwise voyages), the trans-Arctic ones face the gravest obsta- cles in terms of integration into global trade. In the next chapter, we describe the three principal problems in the way of developing the Northern Sea Route and put forward our claim that introducing the Fourth Industrial Revolution technologies is required for Russia to overcome these obstacles (Lee, S. W., et al., 2020).
CHALLENGES FOR RUSSIA
Although we recognize the existence of various geopolitical interests in the Artic and related negative external factors, we decided to focus on the three signif- icant internal factors hampering navigation along the NSR.
Vessels’ drah and the condition of bulk carriers
The Northern Sea Route (NSR) holds major difficulties for navigation, primar- ily because of significant restrictions linked with vessels’ water drah and width. The route goes through several narrow and shallow passages, particularly in the Kara Sea and in the Laptev Sea. One of the main obstacles is the Yugorsky Strait at the southern entrance into the Barents Sea from the Kara Sea. This strait is 21 nautical miles long with its depths ranging between 12 and 30 meters, which restricts the types of vessels that can safely traverse it (Shpachenko, E. S., 2024)
In the east of the NSR, ships have to travel either via Dmitry Laptev Strait or via Sannikov Strait to move from the Laptev Sea to the Eastern Siberian Sea. The key restriction here is the shallow depths at the eastern entrance into Laptev strait that is less than 10 meters deep there meaning that ships have to have the drah of no more than 6.7 meters. Additionally, only ships of the highest ice class, for instance, of 1A Finnish-Swedish class, can travel there. At the moment, only three ships of over 2,000 Panamax class vessels have this 1A certification.
Thus, even despite the potential held by the Arctic navigation, traveling along the NSR is difficult because of many physical and regulatory restrictions. A limited number of vessels that meet those requirements once again emphasizes the prob- lems in the way of expanding Arctic maritime trade along the NSR.
Navigation infrastructure in the Arctic
Another distinctive feature of the Arctic maritime routes is the limited number of accessible ports. The Arctic Logistics Information Bureau reports that the North- ern Sea Route (NSR) has only 16 ports, and many of them are icebound for part of the year. Such key ports as Murmansk and Petropavlovsk on the Far Eastern Kamchatka Peninsula are vital for the future development of the NSR. Both ports are expected to serve as the key terminals and logistics centers (Tsvetkov, et al., 2020).
The Russian government and investors clearly understand the need to restruc- ture the transportation infrastructure. Since then, Russia has aimed to build a series of emergency centers supporting meteorological and rescue services, and to launch border patrols along the NSR. Sea ports’ capacities also need to be expanded.
Similarly, other countries of the Arctic region position themselves as potential key actors in the Arctic navigation (for instance, such ports as Kirkenes in Norway, Vopnafjörður in Iceland), and their development also largely depends on financial stability and foreign investment.1
Therefore, Arctic maritime routes are restricted by port infrastructure, but currently, countries are massively investing into transforming key points into vital hubs. The success of those efforts will depend not only on economic factors, but also on international cooperation and foreign investment.
Foreign investment
This brings us to the question of foreign investment. Recently, dependence on foreign banks’ loans has been significantly reduced, and financing for major Russian mega-projects in the Arctic comes directly from foreign investors (Shpachenko, 2024).
Geopolitical tensions that emerged in 2022 resulted in western companies abandoning their investments into joint Arctic projects. At the same time, Asian countries are demonstrating increased interest in investing. However, wider reper- cussions of this shih remain uncertain, since discussions are being held regularly on whether Russia is ready to overcome financial and technological obstacles con- nected with deeper interactions with Asian partners.
Russian investors proposed increasing program-based public funding for infrastructure initiatives. Additionally, there is obvious desire to create interna- tional funding channels together with states that share Russia’s vision of the Arctic, particularly within such groups as BRICS and the Shanhgai Cooperation Organiza- tion (SCO) (Badylevich, 2023)
1 China has strengthened its economic ties with Iceland considered as a future center of Arctic navigation, and also with Denmark (the Faroe Islands).
CONCLUSION
Russia should become a leader in introducing Fourth Industrial Revolution technologies on the NSR, but this development is obstructed by low population density, shrinking availability of workforce, high cost of investment and mainte- nance in the extreme conditions of Eurasia’s Arctic Ocean. Still, continuingly rising temperatures in the Arctic accelerated the melting of sea ice, which resulted in seasonal gaps on the Northern Sea Route (NSR) and in a growing trend of ice-free summer months. Simultaneously with initiatives concerning the liquefied natural gas (LNG), creating a logistics trade route along the NSR could become an effec- tive approach to attracting qualified workforce, stimulating the development of civil infrastructure, which, in turn, could improve the competitive edge of Arctic resources exports and ensure the safety of navigation along the coastline.
This essay described the prospects of efficient navigation along the NSR and considered the three internal problems connected with the construction and con- dition of bulk carriers, port infrastructure, and foreign investments into the Russian Arctic project. Although political conflicts and tensions in the Arctic have pro- duced negative consequences, such as an impact on the Arctic ecosystem, rallies of indigenous population, and greater militarization, these problems have, none- theless, stimulated a steady development of Arctic maritime routes and technolo- gies supporting Arctic maritime operations.
The Arctic’s climate and consequent geopolitical opportunities are on the verge of making it a new frozen playground for future generations. Developing the transportation and logistics infrastructure of the Russian Arctic is a leading factor in economic growth and in exploring this gigantic country’s natural resources. The Northern Sea Route (NSR), a navigation route that is about 5,600 kilometers long, is today the leading importing part of the Arctic transportation complex. In order to promote this route as the most viable transit option, it requires developing several infrastructures and projects such as modernizing and expanding Arctic ports and improving the support fleet to ensure efficient maritime transportation. This work is intended to ensure high-quality freight shipping in Russia’s Arctic waters and to improve maritime navigation security in the harsh polar climate.
This essay considers the advantages this region offers for international trade with an emphasis on the Northern Sea Route (NSR), the North-West Passage (NWP), and the Transpolar Sea Route (TSR), and the problems arising in connec- tion with developing the Russian Arctic. This region, indeed, is ohen criticized for the buildup of military presence and/or for environmental problems. Still, it is worth noting that scientists also point out that the existing sea routes could be
replaced with transpolar ones. The main thing is gauging the degree of impact the Arctic zone’s unique conditions have on its economic activity thereby conse- quently influencing Arctic projects’ capital intensity and, accordingly, their eco- nomic prospects.
ADVANTAGES OF ARCTIC NAVIGATION
The Northern Sea Route (NSR) and its Conditions
The Arctic sea ice has reached the critical threshold where ice-free summers have become a regular phenomenon in the larger area of the Arctic Ocean. NASA’s studies show that years-old ice, the oldest and thickest ice in the region that has traditionally been the main obstacle to navigation, has been disappearing at a faster pace than the newer, thinner ice (Zaikov K.S. et al., 2019). Ice-free periods along the main navigation routes in the Arctic are predicted to increase from about 30 days in 2010 to over 120 days by mid-century (Ibid). Additionally, the distri- bution of the remaining summer ice in the Arctic Ocean is also expected to shih. Studies show that sea ice will remain for the longest time along the northern edges of the Canadian Arctic Archipelago and Greenland, while the Arctic’s central and eastern areas will experience the greatest ice shrinkage, which will further extend the navigation season along the Northern Sea Route.
The longer ice-free period has multiple advantages. It cuts the distance ships have to travel and the time they need to do it in thereby increasing supply chain efficiency; it also increases shelf life of perishables, for instance, food. Additionally, it allows companies and countries to introduce extra slow navigation in an attempt to cut greenhouse gas emissions. Extra slow navigation entails lower average speed, which increases energy efficiency, cuts emissions and fuel spending. Therefore, the Northern Sea Route allows a vessel travelling from Antwerp to Tokyo to reduce its speed thereby cutting fuel spending and emissions, yet this vessel will arrive in its destination port at the same time it would have arrived in had the ship used the Suez Canal (Myllyla, Y. et al., 2016).
Cela va sans dire, clearly, that the advantages held by the Artic navigation routes reduce dependence on such critically important nodes as the Panama Canal, the Strait of Malacca, and the Suez Canal. Since increasingly fewer vessels travel through these vital passages, the countries that control them are losing their influence over the global trade and face falling shipment revenues that tradition- ally fund the maintenance of these “nodes” (Humpert & Raspotnik, 2012).
Economic expediency of Arctic navigation
There are three principal factors defining global maritime shipping: regular- ity, being on time, and scale efficiency, which are currently difficult to achieve in Arctic shipping. Consequently, the Arctic routes’ unpredictable schedules and wildly varying travel times are major obstacles in the way of expanding Arctic
shipping. Most of the world’s cargo ships travel along regular routes known as line shipping. Over 6,000 such vessels, mostly container ships, follow pre-de- termined routes docking in various ports to load and unload goods, thereby con- tributing to developing trade in the countries’ inner regions. Profitable maritime shipping depends on large-scale operations that ensure stable, predictable, and year-round services. In particular, container shipping operators depend on plan- ning their voyages in advance and on ensuring interrupted services. Unlike them, bulk carriers, both for dry goods and non-dry goods, have less predictable sched- ules since their routes depend to a greater degree on changes in the demand for nonvital cargo.
Out of the four types of Arctic voyages (Arctic destination, intra-Arctic, trans-Arctic, and coastwise voyages), the trans-Arctic ones face the gravest obsta- cles in terms of integration into global trade. In the next chapter, we describe the three principal problems in the way of developing the Northern Sea Route and put forward our claim that introducing the Fourth Industrial Revolution technologies is required for Russia to overcome these obstacles (Lee, S. W., et al., 2020).
CHALLENGES FOR RUSSIA
Although we recognize the existence of various geopolitical interests in the Artic and related negative external factors, we decided to focus on the three signif- icant internal factors hampering navigation along the NSR.
Vessels’ drah and the condition of bulk carriers
The Northern Sea Route (NSR) holds major difficulties for navigation, primar- ily because of significant restrictions linked with vessels’ water drah and width. The route goes through several narrow and shallow passages, particularly in the Kara Sea and in the Laptev Sea. One of the main obstacles is the Yugorsky Strait at the southern entrance into the Barents Sea from the Kara Sea. This strait is 21 nautical miles long with its depths ranging between 12 and 30 meters, which restricts the types of vessels that can safely traverse it (Shpachenko, E. S., 2024)
In the east of the NSR, ships have to travel either via Dmitry Laptev Strait or via Sannikov Strait to move from the Laptev Sea to the Eastern Siberian Sea. The key restriction here is the shallow depths at the eastern entrance into Laptev strait that is less than 10 meters deep there meaning that ships have to have the drah of no more than 6.7 meters. Additionally, only ships of the highest ice class, for instance, of 1A Finnish-Swedish class, can travel there. At the moment, only three ships of over 2,000 Panamax class vessels have this 1A certification.
Thus, even despite the potential held by the Arctic navigation, traveling along the NSR is difficult because of many physical and regulatory restrictions. A limited number of vessels that meet those requirements once again emphasizes the prob- lems in the way of expanding Arctic maritime trade along the NSR.
Navigation infrastructure in the Arctic
Another distinctive feature of the Arctic maritime routes is the limited number of accessible ports. The Arctic Logistics Information Bureau reports that the North- ern Sea Route (NSR) has only 16 ports, and many of them are icebound for part of the year. Such key ports as Murmansk and Petropavlovsk on the Far Eastern Kamchatka Peninsula are vital for the future development of the NSR. Both ports are expected to serve as the key terminals and logistics centers (Tsvetkov, et al., 2020).
The Russian government and investors clearly understand the need to restruc- ture the transportation infrastructure. Since then, Russia has aimed to build a series of emergency centers supporting meteorological and rescue services, and to launch border patrols along the NSR. Sea ports’ capacities also need to be expanded.
Similarly, other countries of the Arctic region position themselves as potential key actors in the Arctic navigation (for instance, such ports as Kirkenes in Norway, Vopnafjörður in Iceland), and their development also largely depends on financial stability and foreign investment.1
Therefore, Arctic maritime routes are restricted by port infrastructure, but currently, countries are massively investing into transforming key points into vital hubs. The success of those efforts will depend not only on economic factors, but also on international cooperation and foreign investment.
Foreign investment
This brings us to the question of foreign investment. Recently, dependence on foreign banks’ loans has been significantly reduced, and financing for major Russian mega-projects in the Arctic comes directly from foreign investors (Shpachenko, 2024).
Geopolitical tensions that emerged in 2022 resulted in western companies abandoning their investments into joint Arctic projects. At the same time, Asian countries are demonstrating increased interest in investing. However, wider reper- cussions of this shih remain uncertain, since discussions are being held regularly on whether Russia is ready to overcome financial and technological obstacles con- nected with deeper interactions with Asian partners.
Russian investors proposed increasing program-based public funding for infrastructure initiatives. Additionally, there is obvious desire to create interna- tional funding channels together with states that share Russia’s vision of the Arctic, particularly within such groups as BRICS and the Shanhgai Cooperation Organiza- tion (SCO) (Badylevich, 2023)
1 China has strengthened its economic ties with Iceland considered as a future center of Arctic navigation, and also with Denmark (the Faroe Islands).
CONCLUSION
Russia should become a leader in introducing Fourth Industrial Revolution technologies on the NSR, but this development is obstructed by low population density, shrinking availability of workforce, high cost of investment and mainte- nance in the extreme conditions of Eurasia’s Arctic Ocean. Still, continuingly rising temperatures in the Arctic accelerated the melting of sea ice, which resulted in seasonal gaps on the Northern Sea Route (NSR) and in a growing trend of ice-free summer months. Simultaneously with initiatives concerning the liquefied natural gas (LNG), creating a logistics trade route along the NSR could become an effec- tive approach to attracting qualified workforce, stimulating the development of civil infrastructure, which, in turn, could improve the competitive edge of Arctic resources exports and ensure the safety of navigation along the coastline.
This essay described the prospects of efficient navigation along the NSR and considered the three internal problems connected with the construction and con- dition of bulk carriers, port infrastructure, and foreign investments into the Russian Arctic project. Although political conflicts and tensions in the Arctic have pro- duced negative consequences, such as an impact on the Arctic ecosystem, rallies of indigenous population, and greater militarization, these problems have, none- theless, stimulated a steady development of Arctic maritime routes and technolo- gies supporting Arctic maritime operations.
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