Economic Feasibility of the Northern Sea Route

Designing & Managing the Supply Chain

Term Paper -Proposal

2008.10.14

Woo Youn Ju

What is Northern Sea Route ? Background

Glacier on the North Pole is melting because of the Global warming

The Northern west sea route and Northern east sea route are temporally opened at summer season (2~4 month)

Arctic may be changed to an island in 2020 Needs to prepare the commercial sea route

CanadaRussia

Green Land

Northern West Route

Northern East Route

Example of the Northern Sea Route Economic Effects

From Netherlands to Busan

Current route: over 20,000Km and 24 days

NSR: 12,000Km and 14 days

Case: Shipping Line company Analysis the economic feasibility

Prepare the icebreaker vessel• Purchase an icebreaker vessel• Remodeling the original vessel

Analysis the market share and decide the specific route• Amount of Import and Export at each ports (Countries)• Change or divide the routes

Save cost• Short travel distance• Oil price

Etc• Weather effect – The possibility of keeping the due date

An icebreaker vessel

Previous researches & Difficulties An Economic Viability and Feasibility Study on the N

orthern Sea Route and Ice Class Merchant Ships , Korea Maritime University Research Center, Joe sung chul, 2002.

Previous work is for development of the icebreaker vessel as a merchant ship.

The study of changing routes for specific shipping line company is not developed yet.

It is not easy to get the data of export/import TEUs and the price of the specific route because of commercial confidential.