Evaluation of the Proposed Arctic Rail Link and Northern Sea Route: A Study of the Economic Prospects of Finland’s Arctic Region

• Main Author: Sivonen, Antti
• Format: Other/Unknown Material
• Language: English
• Published: 2021
• Subjects: Finance; fi=Liiketalous; hallinto ja markkinointi|sv=Företagsekonomi; förvaltning och marknadsföring|en=Business Management; Administration and Marketing|; arctic region; sea routes; Russia; transport; maritime navigation; shipping; international cooperation; freight containers; ships; marine traffic; Degree Programme in International Business and Logistics; Arctic; Climate change; Northern Finland; Northern Sea Route
• Online Access: http://www.theseus.fi/handle/10024/508104

As the concluding work of the International Business & Logistics degree, this dissertation sets out to evaluate the feasibility of the Arctic Sea rail track as a new logistics channel in Northern Finland and the prospects of the Northern Sea Route. At present, the Arctic Sea track remains at a conceptual level and the NSR is widely underdeveloped. The hypothesis is that both of these logistics channels will develop over time correlating with one another, the Arctic Sea track being more dependent on the development of the NSR than vice versa. The future development of these is dependent on several factors and stakeholders. Therefore, the method of research is a comparative literature review, combining and analyzing relevant studies and other resources. The first portion of the thesis reviews the potential shipping demand for the Arctic Sea track from the NSR and the regional industries. The next point of examination is the nature of container shipping and the NSR’s competitiveness as a sea route between Europe and Asia compared to the more prevalent Suez Canal route. As a relevant stakeholder to this topic, the stance of the shipping industry has been taken into consideration. Reviewing these factors is intended to facilitate evaluation of the potential container traffic through the NSR. The dissertation also evaluates the obstacles and the resources present in the Arctic region, to better understand what fixed regional incentives promote economic development, and what are the necessary development requirements. The region is rich in resources, but requires large investments to develop. The geopolitics and international political forums for Arctic are examined, along with the Arctic interests of different states to investigate the basis of intergovernmental cooperation and coordination in the area. The research concludes that the NSR and the Arctic region’s infrastructure will likely develop and witness greater use than thus far. The driving factors are climate change and investments in resource extraction. The improved accessibility brought by this development should pave the way for the shipping industry in due course. Despite these changes, the Arctic Sea track does not appear to be as financially feasible as hypothesized at the beginning of the research.