Arctic shipping hits a record as Hormuz and Bab Al Mandab get harder to rely on

Ships are heading north as the region's southern chokepoints become harder to rely on: Russia's Northern Sea Route logged a record 133 voyages in September, the Financial Times reports. That's 46% more than in August and more than four times the 2022 level. Houthi threats still hang over Bab Al Mandab, and the Iran war has sharply constrained traffic through Hormuz.

Why it matters: DP World is already on the route. It has worked with Russia's Rosatom on Arctic container shipping since 2021. The pair set up the USD 10.3 mn International Container Logistics JV in 2023, with Rosatom holding 51% and DP World 49%. In March, they moved toward another 51/49 logistics venture built around Rosatom's controlling stake in Fesco.

Chinese shippers are testing the Arctic shortcut to Europe

Russian-flagged vessels still made nearly half of September's crossings, but more Chinese shippers are trying the route. The Chinese container ship Dubai Tower sailed from Qingdao to Felixstowe through the Arctic in 24 days last month. A voyage via Suez or the Cape of Good Hope usually takes 40 days or more, so the Arctic route saved more than two weeks. The operator sent a second vessel from Ningbo along the same route on 27 September.

The cargo mix is widening beyond gas. Gas carriers serving Yamal and Arctic LNG 2 are regulars, but September also brought 29 bulk-carrier transits, against 18 in August and a September high of 12 last year, and Lloyd's List data also showed crude tanker traffic on the Northern Sea Route reaching a record high in September.

The Arctic route depends on Russian clearance and a short summer season

Every ship needs clearance from the Northern Sea Route administration, which Rosatom controls. The corridor is split into 28 sections, and navigation requirements change with ice conditions. Russian oversight governs access as much as the weather does, and the company in charge is DP World's majority partner in both ventures.

The route is open only for a few summer months. September is about as good as conditions get, with sea ice at its seasonal minimum. Search-and-rescue and spill-response capacity are also limited.