Plans to build a new container port on the Northern Sea Route (NSR) could be up for review after the University of Iceland’s Institute of Finance and Economic Studies published a report casting doubt on the project’s commercial viability.
The report, cited by English-language Icelandic publication ‘Iceland Review’, suggests that the goal of turning the country into a profitable transshipment hub will not be realized for 40-50 years even if the Arctic ice continues to melt.
The project is a joint venture between two municipalities in Northeast Iceland – Langanesbyggo and Vopnafjaroarhreppur – and a consortium of German and Icelandic companies.
It looks to build a transshipment hub in Finnafjörður in an effort to take advantage of Arctic routes’ increasing accessibility.
For more information on the NSR, read this exclusive PTI insight.
The hope is to build a port that will be an ideal location to move cargo from large, ice-strengthened ships to smaller vessels for the rest of the journey.
However, the report states that “Iceland is never the most economic option” and that for some routes it is more economical not to transship at all.
The melting of Arctic sea ice has raised the possibility of using the NSR to connect Europe and the Eastern seaboard of the US with Asia.
If it comes to fruition then it could see a host of new countries becoming maritime hubs, such as Iceland and Russia.
On January 3, 2020 Port Technology International reported on plans from Russia overhaul its logistics infrastructure in the Arctic.
It is one of the most contentious issues in the maritime industry and many of the world’s largest carriers have ruled out using it due to the environmental concerns.