The conflict in the Middle East and disruptions in the Strait of Hormuz have highlighted the fragility of the global maritime system. Against this backdrop, Arctic shipping routes are attracting renewed interest as climate change makes navigation more accessible. Coface’s analysis shows, however, that their commercial impact will remain limited over the next five years, although they could still offer meaningful benefits for certain commodity flows.
Key figures
- 80%: the share of maritime transport in global trade in goods
- 3.5%: the share of trade between East Asia and Europe or North America that could use Arctic routes within five years
Shorter routes in a strained global maritime system
Maritime transport accounts for more than 80% of global trade, concentrated among three major regions, East Asia, Europe and North America, and structured around a limited number of strategic corridors. This concentration makes global trade particularly vulnerable to geopolitical shocks.
Recent disruptions in the Red Sea, combined with tensions around the Strait of Hormuz and changes in international trade policy, particularly in the U.S., highlight this vulnerability. In this context, Arctic routes appear to offer a theoretical alternative, significantly reducing distances by up to 40% between East Asia and Northern Europe and by around 20% to the East Coast of North America. Their increasing navigability, driven by climate change, raises important questions about their economic viability.
Real potential, mainly focused on bulk transport
To assess the economic viability of these routes, Coface compared unit transport costs on Arctic routes and traditional corridors for two major routes – Asia–Northern Europe and Asia–North America – and for three main categories of vessels: tankers, bulk carriers and containerships.
The results show that, over a five-year horizon, Arctic routes will remain primarily dedicated to the transport of raw materials. Cost savings are particularly significant for liquid bulk (crude oil, diesel, methanol or LNG), with reductions of up to 45% to 50% in some cases. Dry bulk (cereals, ores, construction materials) may also become competitive, but mainly when ships can operate without icebreaker escort.
Conversely, containerized transport remains uncompetitive, despite the shorter distances. Operational constraints, the limited size of vessels and the specific costs of Arctic navigation prevent it, at this stage, from competing with the economies of scale of traditional routes.
A limited overall impact on trade despite some sectoral winners
In total, only 3.5% of trade between East Asia, Northern Europe and North America is likely to actually use Arctic routes. Their overall impact on the global trade map would therefore remain limited in the short term.
Certain sectors could nevertheless benefit. This is particularly the case for industries linked to cereals, energy, metals and timber.
How should this be interpreted? 7% of the value of goods exported from North America to East Asia could be transported via Arctic routes. This amounts to $22 billion: $6 billion in dry bulk and $16 billion in liquid bulk.
Data for the graph in .xlsx format
Bulk exporters based on the U.S. Northeast coast or in Northern Europe could improve their competitiveness in Asian markets through lower transport costs and reduced transit times. By contrast, some competitors in South America, such as Brazil with iron ore and Chile with copper, and in Africa, including the Democratic Republic of the Congo for certain minerals, could see their relative transport competitiveness decline.
Beyond producers, countries that rely heavily on traditional shipping routes could also be exposed. Egypt and Panama, where canal revenues represent a significant share of GDP, are particularly vulnerable. Some major port hubs supporting Asia-Europe trade, such as Singapore and, to a lesser extent, Jebel Ali, could also see their strategic importance diminished if part of the trade flows shifts northward. This risk remains a longer-term concern, however, as Arctic shipping is not expected to expand into container transport before 2030.
A trade route that is still of secondary importance, but a major geopolitical issue
While Arctic routes offer a distance advantage, their development still faces significant constraints. Navigation windows remain seasonal, ice conditions are variable and unpredictable, and the use of icebreakers is often essential.
The Arctic has thus primarily become an arena of growing strategic rivalry. The Northern Sea Route remains largely controlled by Russia, while China is gradually strengthening its presence and polar capabilities. The United States is also seeking to increase its influence in the region. In this context, the development of Arctic routes is not simply a matter of logistics costs, but also involves issues of sovereignty, control of critical infrastructure, access to resources and the reshaping of geopolitical balance.
In the short term, the value of these routes appears to be more political than commercial. Until container transport becomes economically viable at scale, they are unlikely to significantly disrupt the major patterns of global trade.
The Arctic maritime routes are attracting attention because they shorten distances. However, the commercial interest over the next few years remains very limited and is concentrated mainly around raw materials.
notes Eve Barré, sector economist at Coface.
Go further
> Download the study (pdf format)
> Read our Transport sector analysis
