Decarbonisation and Maritime Transhipment lines: Congested South vs Strategic North

International Institute for Middle East and Balkan Studies (IFIMES)[1] from Ljubljana, Slovenia, regularly analyses developments in the Middle East, Balkans and around the world. Dr Maria Smotrytska is senior research fellow at IFIMES/DeSSA and senior research sinologist specialized in the investment policy of China. In her comprehensive analysis entitled “Decarbonisation and Maritime Transhipment lines: Congested South vs Strategic North” she analyses the trans-Oceanic shipping lanes, new short cuts in Afro-Asia and railroad alternatives for the efficient and de-carbonised cross-Eurasian connectivity.

Profile photo of Maria Smotrytska
Dr Maria Smotrytska, Senior research Fellow at IFIMES/DeSSA

Decarbonisation and Maritime Transhipment lines: 

Congested South vs Strategic North

 

Following the Glasgow Climate summit (COP 26), the International Institute for Middle Est and Balkan Studies (IFIMES) conducts series of research papers and reports that aim at revisiting and rethinking the trans-Oceanic transport and pan-Eurasian (existing and possible) corridors, as a way to de-carbonise our planet for the universal betterment. Present study, coming from the IFIMES Senior Researcher of DeSSA, elaborates also on the so-called ‘Artic Argument’ of professor Anis H. Bajrektarevic, by contrasting and comparing the trans-Oceanic shipping lanes of the warm with those of the cold seas, as well as the need for the new short-cuts in Afro-Asia or the railroad alternatives for the efficient and de-carbonised cross-Eurasian connectivity.

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Improved connectivity, especially through transport links, is an essential condition for economic growth. Transport links not only provide physical access to resources, but also enable producers to take advantage of opportunities in domestic and foreign markets, leading to economies of scale and specialization.

At the grassroots level, local transport links – whether provided by road, rail, or water transport – are essential if local communities are to sell their produce in neighbouring markets and purchase a range of manufactured goods with the proceeds. The existence of local transport links makes possible specialization of production according to comparative advantage and facilitate the emergence of a local and regional economy.

In the conditions of a market economy, the need to improve the quality of transport services using advanced transportation technologies and the provision of fundamentally new competitive transport services comes to the fore. This is primarily due to the presence of real competition between different modes of transport.

Transportation logistics between Far East and Western Europe is vital for world’s economic development, but today we do not have reliable technologies and transport lines. Due to this it is necessary to think on few aspects, which may determine the development of environmentally friendly economies in future: 

  • reliable transportation (safe and environmentally friendly);
  • cheapest modes and transhipment lines; 
  • fastest modes of transportation.

Currently about 98% [Vinokurov,2019] of mutual Far East – West Europe deliveries are made by maritime transport, with aviation transport and railway transport accounting for 1.5 – 2% and 0.5 – 1%, respectively. Approximately 80% of Far East – West Europe cargoes are carried in containers, including about 90% of cargoes brought to West Europe from the Far East (imports) and 70 – 75% of cargoes carried from the West Europe to the Far East (exports) [MAERSK, n.d.]. 

This data shows that investment in rail infrastructure is leading to rail being a viable alternative to both sea and air for trade between the Far East and Europe.

On a global scale, sea transport delivers over 80% of all world cargo [Eurostat, 2021]. In fact, sea transportation plays a major role in world trade. In addition, from an economic point of view, this is the most efficient and inexpensive way to transport cargos

In accordance with the Map 1, for now the most beneficially is the land (green) shipping line. Since Maritime (warm waters – red) transport delivery speeds remain rather low (including those of modern container ships). Vessels travelling along the Eurasian transhipment route run at 20 – 25 knots, while average total travel time, including the Suez Canal passage and port calls, is 35 – 45 days. Besides, there always remains the risk of delays for natural and other reasons (such as waiting for loading at the port of departure). Despite this, the regularity (rhythmicity) of maritime container traffic between the ports of the Far East and the Western Europe is rather high. For example, Maersk Line alone makes six runs per week. However, when using the sea route to carry containers between the Far East and the Western Europe, one must consider not only the actual travel time (4 – 6 weeks), but also the time required for consolidation of cargoes in ports (about 1 week) [Smotrytska, 2021a].

 It is estimated [Elsevier, 2019] that cargo, currently carried by maritime and air (white shipping line) modes between Europe and the Far East, will in future shift to rail because of improved services attributed to the Eurasian transhipment lines. It is indicated that around 2.5 million TEUs could transfer to rail from maritime transport, and 0.5 million from air transport, by 2040, which is equivalent to 50 to 60 additional trains daily, or 2 to 3 trains per hour, in each direction.

Map 1.: Transhipment lines from Far East to Western Europe 

World-Map-Basis_sRGB
Source: IFIMES, 2021 [Smotrytska, 2021a].

Maritime transhipment lines

Maritime routes are corridors of a few kilometres in width connecting economic regions and overcoming land transport discontinuities. International maritime shipping routes are forced to pass through specific locations corresponding to passages, capes, and straits. These routes are generally located between major markets such as Western Europe, North America, and East Asia, where an active system of commercial trade is in place.

To date, there are several maritime transhipment routes that create a global transport logistics chain:

  • The busiest North Atlantic route connects the ports of the Atlantic coast of America with the ports of Western Europe
  • The second busiest route passes through the Suez Canal

This is the shortest route from Europe to Australia, China, and Japan. However, routes to this part of the globe from the East Coast of the United States and from the Caribbean are shorter through the Panama Canal. Until now, many cargo routes between Western Europe and Australia run around the Cape of Good Hope. The route through the Suez Canal is 1.600 km shorter, but due to the high fees for passage through the canal, the longer route is cheaper. In addition, large vessels cannot pass through the Suez Canal [PEMP, n.d].

Map 2.: Main Maritime Shipping Routes and Chokepoints