Cargoes

ern provinces and the Arctic region. The company

U.S.Canadian border. The study estimated that

is also competing with FESCO for international

the total cargo potential between northern Europe,

cargo, providing regular services to ports in China,

the Far East, and North America is approximately

Japan, and Southeast Asia. Its administrative seat

20 mt. Arpiainen further estimates that this ton-

and home base are in Kholmsk, on Sakhalin Is-

nage would employ a fleet of 100 dedicated ships,

land. Payroll staff comprises almost 6250 employ-

assuming an average vessel size of 20,000 dwt and

ees, of whom only 1455 are assigned to transport

five round-trips annually per ship. These figures

and cargo management functions. The fleet in-

reflect the total cargo currently moving between

cludes several gas carriers of 1500 dwt, a variety

these regions and perhaps unrealistically assumes

of vessels with mixed cargopassenger configura-

all of it would be diverted to the NSR. It does,

tions (usually less than 3000 dwt), two 20,000 dwt

however, provide a planning estimate. Not re-

ro-ro vessels, and a pool of general cargo ships in

flected in the estimate is the additional cargo traf-

the usual 3000 to 5000 dwt range. Although nomi-

fic that might be generated by increased NSR ship-

nally freed from port responsibilities in 1991,

ping, increased competition, and decreased costs

Sakhalin Shipping continues to provide much man-

due to economies of scale. Another speculation by

agement cohesion in the ports of Alexandrovsk,

Arpiainen is the extent to which established trad-

Kholmsk, Korsakov, Krasnogorsk, Nikolayevsk,

ing patterns will be altered by the availability of

Poronaysk, Uglegorsk, and Vanino.

the new route. It is likely that increased traffic

along the NSR would generate new trade agree-

ments for Russian products that have not been

Cargoes

widely available to world markets in the past. For

Alexander Granberg, an economic advisor to

example, shipments of coal and timber to Europe

the Office of the President of the Russian Federa-

from Canada would be replaced to some degree

tion, provided the following encapsulated obser-

by Siberian shipments due to their greater prox-

vation on both the importance of the NSR for the

imity.

Russian economy and the type of products that

There are four broad categories of trade that

are being shipped from the region:

will ply the route, and each has its own set of

cargoes. These are exports, imports, cabotage, and

The Northern Sea Route is instrumental in

the flow of goods into and out of Russia's

transit cargoes.

northern regions, which are estimated to bring

in 60% of the entire country's hard currency

Exports

revenue. In 1988 the northern deposits ac-

Exports are domestic Russian products shipped

counted for the Soviet Union's entire produc-

from NSR ports to other countries for consump-

tion of diamonds and apatite and more than

tion. These consist mainly of raw and intermedi-

half of its production of gold, nickel and tin.

ate materials that will be processed into finished

The oil and gas fields of northwestern Siberia

goods in other countries. Exports most significant

supplied 65% and 62%, respectively, of the

to the Northern Sea Route are from Siberia's store-

Soviet Union's entire oil and gas production.

house of raw wealth. These include raw fuels (coal,

Today, the shipping of raw timber and nickel

oil, natural gas, oil shale, peat), bulk ores (iron,

ore from the Yenisey River ports of Igarka and

copper, nickel, bauxite, titanium, cobalt), bulk min-

Dudinka, respectively, makes up the bulk of

tonnage in transit along the western NSR.

erals (apatite, sulphur, sodium chloride, mica), raw

(Granberg 1992)

materials (timber, building stone, alumina, calcite,

other materials used for making glass, cement, and

A recent study for the Finnish shipping indus-

brick), and precious metals (gold, diamonds, rare

try (Arpiainen 1994) estimated the potential cargo

earths). Cruise tourism, which has great potential

volumes that might be shipped via the NSR based

for the region, can also be considered an export

on current trade flows. That study's region of in-

because it brings foreign currency into the coun-

terest was limited to routes having at least a 20%

try.

distance advantage over the canal routes. This cri-

terion allowed consideration of the European lo-

Imports

cations of Great Britain, Germany, The Nether-

Imports coming into the Russian Arctic and Pa-

lands, and Scandinavia; Far Eastern locations of

cific Rim ports via the NSR will be a relatively

Japan, the Koreas, and northern China; and West

minor segment of total cargo flow. The low popu-

Coast North American ports lying north of the

lation density and lack of hard currency will be an