The Opening of the Northern Sea Routes: The Implications for Global Shipping and for Canada’s Relations with Asia

Abstract

All the excitement around the great possibilities that the opening of the Northwest Passage could offer the shipping industry — and Canada — could not last. Just a few years ago, as sea ice in the North seemed to be steadily melting away, observers were eagerly tallying up the savings in time, fuel and costs that a reliably ice-free route across the top of the planet would provide for shippers. A couple of trial runs only confirmed that for shipments from Asia to Europe or North America, or the other way around, the route could shave thousands of kilometres off each trip, compared to journeys through the Suez or Panama canals. Rapid growth in shipping traffic across the Northwest Passage and its sister route, the Northern Sea Route, seemed not just inevitable, but imminent. Just a short while later, it now seems neither imminent nor inevitable. The retreat in sea ice may persist, but it is evident that due to regular fluctuations in ice coverage, the Northwest Passage will not be reliably ice-free for many, many years, if ever. Shipping may be more possible through the Northwest Passage than it was in the past, but it will not be consistently unobstructed. The challenges of ice combined with Arctic weather conditions may well mean that any shipping through the passage is slower than expected. Other complicating factors include uncharted or poorly charted sea lanes and the difficulty in securing insurance for Arctic shipping. At the same time, the competition from alternate routes is only becoming more intense, with expansions in both the Suez and Panama Canals and the potential for a new canal across Nicaragua. Regarding the Northwest Passage, Canada lacks much of the infrastructure in the North that would make Arctic passage a strong competitor, including multiple ports enroute and sufficient icebreaking equipment. There are still advantages that might draw some shipping away from traditional routes to the northern passages, particularly for the movement of western resources to growing Asian markets. But even moderate levels of shipping through the Northwest Passage do have the potential to change Canada’s relationship with its Asian trading partners, especially China. The Canadian and Chinese governments share a number of priorities regarding the Arctic, including environmental protection, safer navigation and resource development. These will provide opportunities for more dialogue and engagement between the two countries. While the Northwest Passage may not become the important trans-shipment route to Asia once imagined by enthusiastic observers, the most meaningful impact that a more useful route may provide is to alter, and improve, the course of Canada’s relations in the Asia-Pacific region. This paper seeks to examine likely developments and trends in Arctic shipping given the shrinkage of the polar ice cap, and to situate these trends in the broader context of changing global maritime and trade realities with particular focus on their impact on trade with Asia. There are implications for Canada and its relations with Asia, especially China, that flow from these developments.