On September 10, 2019, ASP COO Andrew Holland was quoted in an article from Raconteur on the Northern Sea Route and the potential for development. As the sea ice retreats at record levels, both China and Russia have been active in the development of the Northern Sea Route, recognizing the economic potential. However, the author argues the U.S. has been absent.
China believes that the Northern Sea Route has the potential to drastically cut down on shipping costs. Yet, not everyone thinks the potentially more expedient route will replace the Panama Canal. Holland believes that the cost of shipping is relatively insignificant when it comes to exporting foods. He adds that commercial operators value certainty the most.
“The Arctic is not a predictable environment. Conditions can be hazardous, even in the height of summer. Therefore, while shippers may send oil, natural gas and coal this way, they probably won’t risk transporting assembled goods for the just-in-time manufacturing market through the Arctic any time soon.”
“The Chinese are most interested in the Northern Sea Route, not to export goods, but to import them. China is particularly reliant on hydrocarbon shipments. It knows too that in a time of conflict, the U.S. Navy could easily close the Strait of Malacca, which would strangle its economy.”
However, short of the U.S. Navy blocking the Strait of Malacca, China and Russia are calling the shots. If the U.S. is not prepared to cede leadership and strategic advantage to the Russian and Chinese, then, the author argues, the U.S. needs to develop a coherent policy on the Arctic.
Read the full article in Raconteur.