The ongoing trade disruptions from the Iran war have enabled China to gain a trade edge, but it requires shipping vessels to brave the Arctic.
On Saturday, the Chinese container shipping company Sea Legend Line launched its first regular shipping route through the Arctic, traveling a route that’s more than 3,400 miles long along the northern coast of Russia. The vessel went from China’s industrial hub Ningbo—located about halfway between Shanghai and Beijing—all the way to the U.K.’s Felixstowe, about 70 miles north of London. Dubbed the “Ice Silk Road,” the route takes about 20 days to complete, which is just half the shipping time of the route that passes south through the Suez Canal.
Countries have scrambled to find alternative trade routes after the effective closure of the Strait of Hormuz following U.S.-Israeli attacks on Iran in February. Additional disruptions caused by continued Houthi threats to the Bab al-Mandab Strait into the Red Sea have subsequently disrupted traffic through the Strait of Hormuz. This has caused longer transit times as ships look for alternative routes, driving up fuel and insurance costs, as well as unsettling supply chains. U.S. Secretary of State Marco Rubio has even floated the idea of a more permanent global shift away from the Strait of Hormuz as a result of the trade uncertainty that has hiked energy prices and shaken supply chains.
It seems China may have found a way to dodge this. The country first took interest in the northern sea route (NSR) more than a decade ago in 2013, when Yong Shenge, a Chinese cargo ship, became the first Chinese ship to ever reach Europe on the route. However, the route has remained largely inaccessible because of the volume of sea-ice in the area.
Global climate change creates a new trade route
Global climate change may have also altered China’s fortune, as warmer temperatures in the Arctic have transformed the NSR from a course only accessible in the warmest months to one traversable for a substantial portion of the year. While there was a 20-year slowdown in the rate at which sea-ice melted in the Arctic, that ended last year as new research from the University of Southampton shows melting levels continuing to increase.
Sea Legend Line made its first successful test voyage through the NSR in October.
“The long-term goal for the Arctic route is to extend the navigable season,” Sea Legend Line chief operating officer Li Xiaobin told Chinese financial magazine Caixin last year. “Our goal is to expand the sailing season from two months this year to three months next year and four months the following year and eventually achieve year-round operations.”
China’s chilly trade strategic
China’s newly leveraged trade route may still produce challenges. In addition to its seasonal accessibility, the NSR is primarily controlled by Russia, which was originally skeptical of Chinese President Xi Jinping’s initial interest in the development of a “polar Silk Road” in 2017. While Russia has relinquished some control of the area to China following its invasion of Ukraine, Russia still plays a key role in Chinese shipping vessels’ passage through the route.
Today, Russian state corporation Rosatom issues permits to sail through the NSR through the Northern Sea Route Administration (NSRA). Rosatom also oversees shipping along the route and provides icebreaker ships to escort shipping vessels along the route.
Still, this alternative trade route could stand to benefit China. Increased use of the NSR could lessen China’s dependence on the Strait of Malacca, the chokepoint connecting the Indian Ocean and the South China Sea through which 80% of the country’s crude oil is imported. China is under threat from the “Malacca Dilemma,” or the threat of a naval blockade of the trade passage during geopolitical disruptions that would roil China’s economic security.
Another available shipping route could help protect Chinese trade, but it’s far from a panacea to risk, Dylan Loh, an associate professor in the Public Policy and Global Affairs programme at Nanyang Technological University in Singapore, told Al Jazeera. More time is still needed to determine if it’s economically feasible, let alone reliable. Last year, only 23 container ships passed through the NSR, a modest increase from 15 in 2024, according to an Allianz Commercial shipping analysis.
“It is an alternative, but we will need more time to observe how feasible it is from an environmental, financial and reliability perspective before we can make a conclusion,” Loh said. “China’s route represents a hedge, not a complete pivot or true alternative for now, as it does not have the predictability that traditional sea routes have.
This story was originally featured on Fortune.com
