Analysts assess cost, risk and logistics ahead of China’s Arctic container route launch

 China is preparing to launch the first liner-type container service between Asia and Europe via the Northern Sea Route (NSR) in September, prompting shipping analysts to weigh the logistics and costs of what remains a niche venture.

For the first time, a scheduled service resembling a conventional Asia–Europe loop will traverse the Russian Arctic, linking Qingdao, Shanghai and Ningbo-Zhoushan with Felixstowe, Rotterdam, Hamburg and Gdansk.

Intermodal head of research Yiannis Parganas noted that the inaugural voyage, already fully booked, promises an 18-day transit from East Asia to Northern Europe – less than half the time required via the Suez Canal. The service will be operated by China’s Haijie Shipping Co.

According to Mr Parganas, the appeal is clear on paper. The NSR avoids chokepoints such as the Suez Canal and the increasingly volatile Red Sea. “For high-value, time-sensitive cargoes – from fast fashion to consumer electronics – the NSR offers faster delivery, lower inventory costs, and the chance to bypass Europe’s congestion-heavy holiday peak season,” he said.

Experimental stage:

Yet beneath the headlines lies a more complex reality. Banchero Costa head of research Ralph Leszczynski described the project as “quite experimental” and, even if launched, “a rather niche operation.”

Drewry senior manager for container research Simon Heaney echoed this view, characterising the venture as still in “beta testing mode.”

For now, the NSR service is expected to be strictly seasonal, confined to a July–November window until a sufficient fleet of high ice-class container ships can extend operations. This year, only one voyage is planned.

“Even in peak summer, when ice is at its minimum, you still need ice-class reinforced ships, which are scarce and far more expensive than standard vessels,” said Mr Leszczynski. “In many cases, you also need icebreaker assistance, which further drives up insurance and operating costs.”

Logistics and viability:

Compared with the NSR, the Suez Canal still offers year-round reliability and the economies of scale of 20,000+ TEU vessels. “The Arctic’s first liner is launching with a 4,890-TEU ship – large for ice navigation, but modest by Asia–Europe standards,” Mr Parganas explained.

Mr Leszczynski added, “The NSR may save time, but costs per TEU will certainly be higher. For most containerised cargo, low cost and safe delivery matter more than shaving off a few days at sea.”

He further noted that shippers prioritising speed already have established alternatives, “If speed is what you need and you’re willing to pay for it, air freight or the existing China–Europe rail service are viable options.”

Mr Heaney shared the same view: "The route offers clear potential for faster shipping, but the cost of using ice-strengthened vessels and Arctic escorts compared with routes via the Suez Canal or Cape of Good Hope remains uncertain.

Analysts also pointed to persistent risks. Sparse Arctic infrastructure, unpredictable ice conditions, and limited search-and-rescue capacity continue to undermine reliability. “Even today, with Russia’s nuclear icebreakers on standby, insurers and charterers remain wary of a route shaped more by geopolitics than commerce,” Mr Parganas observed.

For now, Intermodal suggests viewing the NSR not as a replacement for the Suez but as a seasonal hedge – a pressure valve that operators, particularly Chinese ones, may exploit under favourable conditions. The shipbroker highlighted the double-edged nature of the route: intriguing as an alternative at a time when supply chains demand resilience, but marginal given its seasonal, small-scale capacity geared only to high-value cargoes.

Geopolitical dimensions:

China’s development of a liner-type service along the NSR has reignited debate over whether the Arctic will emerge as a new arena for global competition.

Mr Parganas noted that Russia has made the NSR a strategic priority, tasking Rosatom with expanding infrastructure and icebreaker support. China, meanwhile, has incorporated Arctic shipping into its Polar Silk Road, deepening ties with Moscow amid mounting Western sanctions. “Recent Chinese investments in Arctic ports such as Arkhangelsk, along with joint plans for new ice-class container ships, show that Beijing is playing the long game.

The NSR also offers China a corridor less exposed to Western naval power and sanctions – a point not lost on European policymakers. “For European nations already concerned about maritime security, a larger Chinese presence in the Arctic will be scrutinised as much politically as commercially,” Mr Parganas added.

Environmental concerns:

The project has also raised alarm among environmental groups. Clean Arctic Alliance lead advisor Dr Sian Prior warned the Arctic is already under severe stress. “Its waters are warming and acidifying faster than the global average. As a result, sending container ships across the Arctic raises a lot of red flags,” she said.

The alliance cautions that increased Arctic shipping would heighten climate impacts through black carbon emissions, disturb wildlife and local communities, and raise the risk of oil spills.

Dr Prior stressed that any vessel on the route should be ice-strengthened, Polar Code–certified, and prohibited from using residual fuels such as VLSFO. Instead, ships should use distillate fuels or other new fuels with low black carbon emissions, and implement noise abatement plans.

source: Riviera