Korea’s first Arctic container voyage ends, but the economics are still at sea

The first Korean container ship to sail the Arctic route returned to Busan on Sunday after a 50-day round trip to Europe. The voyage showed that the passage can work as a commercial route, though proving that it pays is still a long way off. The war between Russia and Ukraine, with no end in sight, clouds the near-term outlook for a route that runs along Russia’s coast.

The PanStar Acro docked at Jaseongdae Pier in Busan Port on Sunday morning, 50 days after it set out on Aug. 22, the Ministry of Oceans and Fisheries said that day.

Arctic shipping lanes have opened up as climate change shrinks the region’s sea ice. The PanStar Acro took the Northeast Passage, which follows Russia’s northern coast for about 5,600 kilometers (3,480 miles) from the Bering Sea near Alaska west to the Barents Sea. The voyage was Korea’s first trial run on the route since 2016.

After leaving Busan, the ship entered the Arctic Ocean on Aug. 31 and sailed through the East Siberian and Barents seas, among others. It called at Felixstowe, Britain, on Sept. 12 and reached its destination, the Dutch port city of Rotterdam, the following day. After a stop in Gdansk, Poland, on Sept. 18, it crossed the Arctic again on the way home. The ship returned five days later than planned but finished the voyage without major problems.

The PanStar Acro, which can carry 2,758 20-foot containers, unloaded and loaded cargo at its European ports of call. It became the first Korean container ship, the workhorse of maritime logistics, to make a round trip on the Arctic route. The government plans to analyze data from the voyage, including its distance, route, time, cost and fuel consumption, before drawing up detailed plans.

The successful trial is expected to add momentum to the Arctic route push, one of the Lee Jae Myung administration’s national policy tasks. A voyage between Busan and Rotterdam via the Suez Canal covers about 20,400 kilometers and takes 30 to 34 days. The Northeast Passage cuts the trip to about 13,000 kilometers and 20 to 24 days. The route would also let ships bypass chokepoints such as the Suez Canal and give Korea an alternative in the face of geopolitical risks such as the crisis in the Strait of Hormuz.

“This voyage cut the one-way sailing time by 10 days compared with the existing route through the Suez Canal and allowed our container ships to build up polar operating experience and voyage data,” President Lee Jae Myung wrote on X on Sunday. “Building on this, we will make sure the new sea route leads to new growth for Korea.”

The government held a ceremony at Busan Port on Tuesday to welcome the ship home.

Seoul aims to open a regular service on the route around 2030, but many hurdles remain. The biggest is proving that the route pays. Ships can use it only in summer, from July to October. They need ice-strengthened hulls to cope with ice along the way, which makes them more expensive to build and run. Insurance premiums are high because the risks are great and search-and-rescue infrastructure is lacking.

Oil prices matter too. Academics put the oil price at which the Arctic route beats existing routes at about $70 to $80 a barrel. Below that, its economics are hard to guarantee.

“It is true that there are enough risk factors to offset the advantage in distance,” a shipping industry source said. “In the short term, the biggest obstacle is that it is hard to predict when the Russia-Ukraine war will end.”

As long as Western economic sanctions on Russia stay in place, the Arctic route project will struggle to pick up speed. Operating permits, route information and the use of icebreakers all require cooperation with the Russian government. With most countries other than China sitting on the sidelines, Korea will find it hard to go it alone. Even if relations improve after the war, reaching international agreements on standards and environmental rules is expected to take considerable time.

“Shrinking ice alone does not automatically make a route a commercial shipping lane,” said Baek Young-jun, a researcher at Pai Chai University’s Korean-Siberian Center. “Governance of the route, operating infrastructure, economic viability, regulation, sanctions and environmental risks all have to be addressed.”

BY JANG WON-SEOK [[email protected]]