Based on the present potential cargo movement, it may be possible to find a shipment format that is appropriate for NSR transit shipment. Obviously increasing the volume of shipping through the NSR means diverting traffic bound for the EU, the Far East and the West Coast of North America that is currently routed through the Suez or Panama Canal. The volume of petroleum products, minerals, fertilizer, grains, metal products, chemical products and cement that is currently shipped from the EU to Japan, South Korea, China, Hong Kong and Taiwan is approximately 16 million metric tons. Potential also exists in the NSR for shipment of finished commodities such as automobiles, consumer electronics, copy machine and electronic components. These are high-value products which require special ships or container ships, and must be delivered at regular intervals and within a specific time-frame. Equally importantly, these goods are susceptible to deterioration from the harsh thermal conditions of the NSR. The special measures required to protect the cargo are certain to raise the freight rate, and may render NSR shipping uneconomical.
In 1996, 5 million metric tons of cargoes were shipped from Russia and the three Baltic countries to Asia-Pacific. About half of this volume was bound for China. In a breakdown by product type, the most common cargo items were metal products and fertilizer (Figure 4.4-1). These products are ideal for the NSR because they have relatively little sensitivity to delivery time and are resistant to extremes in temperature. Isakov et al. reported that, given improvements to the tariff structures and port tax imposed in the NSR, 1.7-1.9 million metric tons of the 5 million metric tons of this trade could be diverted to the NSR (WP-139). In sum, the most likely scenario for stimulating transit commodities through the NSR is to start with bulk cargoes that are relatively low in regularity, flexible in delivery schedules and resistant to extremes of cold. One special application might be summer shipment from Europe to Japan of marine products for which freshness commands a premium.
Figure 4.4-1 Cargoes exported from Russia and the Baltic countries to Asia-Pacific
4.4.4 Cost simulation
As mentioned in the discussion on variations in NSR cargo, Russia's freighters today carry little more than a modest flow of transit cargo to China and other Asian destinations. When asked how profitable NSR shipping could become if certain types of ship were introduced, many people involved in shipping market are frankly skeptical that the NSR could be cost-competitive. These doubts demand a clear response. Therefore, in Phase II of INSROP an operation simulation project was conducted to calculate shipping costs through four representative NSR routes, using three newly designed vessels larger than the SA-15 (WP-164). Key elements in the simulation were algorithms that expressed the relation between the ship's speed and factors that can slow it down, such as ice thickness and concentration and presence of pressure ridges, as well as measures to ensure the accurate recording of ice data. In the previous cost simulations of NSR navigation, the ship transit speeds were simply determined based on the empirical data or a simple look-up table defining the relation between ice conditions and ship speeds, or even monthly average speeds.(Wergeland, 1992; Schwarz, 1995; Mulherin, 1996).