South Korea’s President Lee Jae-myung says he remains committed to establishing container shipping services between Busan and Europe via the Northern Sea Route by 2030, despite lukewarm commercial interest.
He said ferry operator Panstar Line’s test voyage, with the 2,758 teu Panstar Acro, helped pave the way for the commercial viability of Arctic shipping.
The ship had arrived back in Busan on Sunday, after the 40-day round-trip to Felixstowe and Rotterdam.
Although cargo volumes were below target, just 837 teu loaded on Panstar Acro, Mr Lee hailed the voyage as a success.
He wrote on X: “The ship completed the journey to Europe in a mere 20 days via the Arctic, whereas the Suez Canal route would have taken almost a month. We will continue to prepare for an Arctic shipping era, and this test trip would create new opportunities for businesses.”
Rising global temperatures have melted more Arctic ice, making the Northern Sea Route (NSR) seem a feasible substitute for the Suez Canal, particularly given the Red Sea crisis and US/Israel-Iran tensions.
Promoting Arctic shipping also aligns with the government’s plan to build an economic zone in the south, anchored by Busan, the nation’s primary container port.
The Ministry of Oceans and Fisheries plans to analyse details of the voyage to determine how Arctic shipping could become more commercially viable.
Yet enthusiasm among South Korean shipowners remains muted. At an industry gathering, they noted that, once the Middle East crisis was resolved, the NSR could cease to be an appealing alternative to the Suez Canal route.
Shipping executives pointed out that the NSR could only be navigated between August and November, when the Arctic ice thaws enough to allow passage. Draught limitations also make it impossible to operate large containerships on the route, unlike through the canal.
Notably, Panstar was the sole bidder when the ministry sought operators for the test voyage in May – prohibitive costs, including insurance and modifications for polar navigation, deterred other companies.
In August, the Korea Maritime Institute released a study showing the cost per teu of operating containerships through the Arctic from Busan to Rotterdam was around 55% greater than going via Suez, cancelling the advantage of the shorter sailing time.
During the “welcome-back” ceremony for Panstar Acro yesterday, President Lee said he was aware of commercial scepticism towards the NSR.
He added: “There are people concerned about the costs, but when we gain more experience and attract more cargo on Arctic routes, we can reduce costs and increase trust in the service.”