Feasibility of the Northern Sea route: cases from the oil product tanker market
This Thesis examines the feasibility of the Northern Sea Route for oil product tankers. First, a systematic literature review is conducted to evaluate the extant literature regarding comparative studies between Arctic and traditional routes. Second, three modelling cases are developed to assess the...
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| Format: | Thesis |
| Language: | English |
| Published: |
2021
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| Online Access: | https://orca.cardiff.ac.uk/id/eprint/147849/ https://orca.cardiff.ac.uk/id/eprint/147849/1/2021theocharisdphd.pdf https://orca.cardiff.ac.uk/id/eprint/147849/2/theocharisd.pdf |
| Summary: | This Thesis examines the feasibility of the Northern Sea Route for oil product tankers. First, a systematic literature review is conducted to evaluate the extant literature regarding comparative studies between Arctic and traditional routes. Second, three modelling cases are developed to assess the feasibility of the Northern Sea Route compared to the traditional routes via the Suez Canal and the Cape of Good Hope for the oil product tanker market, based on historic voyages and major trade flows between Europe and Asia. The Thesis draws from classical microeconomic cost theory and classical maritime economics theory to study the economics of the Northern Sea Route. A Required Freight Rate analysis is developed to assess the competitiveness of competing routes. The methodological approach has two objectives. First, the cost assessment is based on ship speed optimisation to minimise the required freight rate of a route alternative. Second, the cost assessment is based on real ship speeds to determine the required freight rate of a route alternative. On the one hand, the cost minimising speed can be optimised with respect to cost and market factors. On the other hand, the real speed tends to depart from the optimal point owing to organisational and technical constraints, ship, and voyage-specific factors, as well as weather factors, amongst others. The main factors considered in the analysis are distance, fuel prices, ship speed through ice, seasonal navigation, icebreaking fees, ice damage repairs, ship size, capital and operating costs, commodity prices and in-transit inventory costs, as well as fuel types and operational modes, concerning commercial factors and environmental regulations. Unique primary and up-to-date secondary data were obtained and used in the analysis. The Thesis contributes to knowledge by explaining quantitatively the use of NSR since 2010, and by employing important cost, market, navigational, and technological factors to establish relationships between factors that affect route choice in ... |
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