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Russia, DP World to jointly establish Arctic route for container transport:Russian nuclear agency Rosatom and DP World have set up a joint venture to develop container shipping through the Arctic, Reuters reports, citing a statement from Rosatom. The JV — dubbed International Container Logistics — has an authorized capital of USD 10.3 mn.
The details: A unit of Rostom responsible for the designated infrastructure operator of the Northern Sea Route will hold a 51% share, while the Russian unit of DP World will own a 49% stake. The company’s priorities are to complete the design of infrastructure facilities and specify the volume of investments necessary, Reuters said.
About the route: The route — which spans from Murmansk located close to Russia's border with Norway to the Bering Strait near Alaska — was only recently made viable on the back of melting Arctic sea ice due to climate change. The route is currently being used mostly to ship hydrocarbons, and only operates nine months of the year due to the thick ice covering most of the route during winter months, but is expected to become a year-round trade route in 2024.
The route can have significant benefits for Europe-Asia trade: The development of this route comes as one of Russia’s key objectives to boost trade between Europe and Asia, as Russia’s focus shifts eastwards amid Western sanctions due to its war in Ukraine. The route slashes seven days off the 23 days it currently takes to sail from the North American east coast to the Bering Strait via the Russia-hugging Northern Sea Route.
Putin’s been lobbying hard for the route: The move follows talks held by Russian President Vlademir Putin during China's Belt and Road forum, where he expressed optimism for the arctic corridor and invited investments. “Russia is not just inviting its partners to actively use its transit potential. I will say more: we invite interested states to directly participate in its development,” Putin said last week.
Background: The two companies had partnered up back in 2021 to collaborate on pilot container shipping between northwest Europe and east Asia through the Arctic.
