Tuesday, June 11, 2019

Global Port and Logistics Outfit Partners Up for Sea Freight Development Along the North Sea Route

Russian Coastal Project Examines Viability of Increase in Containers and General Cargoes
Shipping News Feature
ARCTIC – RUSSIA – Global ports operator DP World has announced that it will be operating the proposed new ports that Russia plans to build along the northern sea route (NSR) in the Arctic to shorten shipping times between the east and west. The logistics enablement outfit, along with partners the Russian Direct Investment Fund; the infrastructure operator of the northern sea route, ROSATOM; and Russian miner Norilsk Nickel, have jointly agreed to implement the project for the integrated development of sea freight via the NSR.

The quadrilateral agreement of intent was signed on June 6, during the St. Petersburg International Economic Forum. The agreement outlines a comprehensive piece of work which will study of the most effective commercial options for the use of the Northern Sea Route. The parties intend to create a strategic partnership in the form of a joint venture for the development of transit cargo traffic through the NSR.

The key objective of the project is to increase the volume of freight traffic along the NSR and through the Arctic zone of the Russian Federation. For the first stage, the parties to the agreement will have to develop a strategy to increase the efficiency of the use of the NSR and to determine ways of developing transit traffic.

The focus will be on linear transportation of containers and other bulk cargo along the Northern Sea Route. It will be necessary to determine the amount of funding for the design and construction of an additional ice-class fleet and icebreakers, as well as the port infrastructure. As we have pointed out before Russia is light years ahead in the field of icebreaking capability.

A separate important area of work will be ensuring industrial safety and environmental protection in the implementation of transportation along the NSR, one of the most inhospitable of trade routes, and hardly home ground for a UAE based company. However DP World now operates successfully globally in a range of environments and His Excellency, Sultan Ahmed bin Sulayem Chairman and CEO of DP World said:

“DP World is uniquely positioned to help drive the development of the NSR. We are excited about the possibilities and the benefits this will bring not only to the Russian economy, but to customers in Asia and Europe. Our expertise in developing new Ports, infrastructure and innovative new supply chain solutions, are key factors in our successes over the last few decades. We see enormous potential in NSR and look forward to creating new successes with our partners”

The parties have agreed to establish a joint working group to conduct an analysis and prepare a feasibility study for the project within six months. Subject to this work being completed a next stage decision will be made on the further development of the project.

The Russian Direct Investment Fund claims that it has many opportunities to attract foreign capital in the largest investment projects in the Russian Federation. ROSATOM is the authorised infrastructure operator of the Northern Sea Route and the owner of the world's only nuclear icebreaking fleet. Norilsk Nickel has production facilities located in the Far North and boasts it has many years of experience in the field of logistics passing through the NSR.