South Korea's PanStar Group announced its plans to expand container shipping on the Northern Sea Route starting next year after completing a test voyage to Europe that took about 20 days. The company aims to compete with major Chinese operators and hopes that a seasonal service focused on high-value cargo will succeed on this route.
Advantages of the Northern Sea Route
The Northern Sea Route, which runs along the Arctic coasts of Russia, is geographically a much shorter passage than going through the Suez Canal. This waterway, which has traditionally been used for transporting Russian energy, has gradually attracted the attention of container shipping companies due to global warming and concerns about disruptions to traditional shipping routes. However, the uneven ice conditions and limited navigation season have prevented this route from being considered a primary option for existing routes.
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PanStar's Plans for the Future
PanStar's President, Kim Hyun-kyum, announced in a recent interview in Busan that the company plans to conduct three voyages next year and gradually increase its number of trips. The company is focusing on the season between July and October when Arctic waters are more navigable and demand for European cargo increases seasonally.
China poses the biggest challenge on this route. Chinese shipping companies have begun test voyages on the Northern Sea Route since last year and are moving towards commercial services. Many of their container ships are built with ice-breaking capabilities.
In the company's test voyage, the PanStar Acro, with a capacity of 2,758 TEU, departed from Busan on August 22 and arrived at Felixstowe in the UK on September 12, then continued to Rotterdam and Gdansk. This journey took about one-third of the time required for the Suez route.
PanStar aims to target cargoes for which timely delivery is crucial, but air freight costs are prohibitively high. These cargoes include temperature-sensitive chemicals, shipbuilding equipment, and heavy components for wind turbines.
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