Choosing Suppliers

Why a new shipping route is 'one to watch' for both freight companies and their clients

6 min read

02 November 2018

Reporter, Real Business

The discovery of a viable Arctic shipping route that cuts down on time, money and fuel emissions could be a godsend for freight companies and their clients.

Global warming is a bad thing. All of us can agree on that.

Wide-scale emissions of fossil fuels, for nearly two hundred years, has dealt the world’s surface a damaging blow, resulting in the prevalence of natural disasters such as flooding, and the loss of wildlife.

Whether you’re a pro-green campaigner or the CEO of a logistics company, and whether you’re passionate about environmental matters or not, everyone has an obligation to live their lives in a way that impacts the environment as little as possible – and this extends to how companies should operate in this new world.

‘Going green’ in business is as good for your PR as it is for the environment

When you’re pitching for new clients or vying with other businesses to bag one, having tangible company values that are part of, and go beyond, your main service, shows you have a vision, and a passion for doing your work for a greater purpose, and that makes for powerful selling value.

In the age of entrepreneurship, belief systems and a founding passion gets you as far, if not further in business than simply what service you provide.

So anyway, let’s go back to why we’re writing about ‘ the environment’ on a Friday.

Well, some strange, but potentially exciting news has just been announced that should be of interest to any and all businesses operating in the suppliers, logistics and freight sectors.

Namely, the Arctic region may be opened as the latest global shipping route.

But why? And why now?

The answer? Global warming…

Global warming melts ice but grows opportunities for global shipping

Whilst the idea of the Arctic becoming a major shipping route all sounds a little fantastical (think Philip Pullman’s novels about talking polar bears) but let’s bring this region down to scale to explain further.

By the ‘Arctic’ region, shippers really mean the ‘North-West passage’ which is a route in the Arctic region of Canada, north of the mainland.

Whilst this area was once a region of great, and often fatal exploration during the last century, today, climate change has done its bit to melt the ice and make the area passable for ships transporting goods.

However, this area is still pretty cold, so this ‘new route’ is only more passable for a few months during the summer at the moment.

Overly-lengthy routes can be revised

For cargo ships transporting goods from East Asia to the east coast of the US, or even to Europe, this route could cut down on hundreds of miles of wasted journey time.

Previously, ships making this journey had to go via South-America, and to the Panama Canal, or even do a pit-stop to the Middle-East via the Suez Canal, both of which seem strangely lengthy and energy wasting routes to be undertaking.

So whilst the creation of this new ‘Arctic’ shipping route comes as a consequence of our collective polluting of the environment, it also allows freight companies a shortcut to deliver goods, which means less journey time, and less climate-damaging energy wasted.

The efficacy of the route has already been proven

And way back in 2014…

A successful journey across this route was undertaken by a cargo ship called the Nunavik that was transporting minerals from Quebec to China.

“From a distance point of view it makes tremendous sense to use the Northwest Passage when it’s available to you.”
– Tim Keane, Fednav

The new route cut the journey time in half, taking only 26 days when it had previously taken 41 days going via the Panama Canal.

“When you start thinking about the North American Arctic as an emerging economy, it engenders a whole different mindset among investors.” –Jessica Shadian, Arctic 360

Shipping on, and shipping out

Whilst there will be some diplomatic hurdles for those engaging in this new shipping economy, (China is eyeing this region up, and shipping advocates are looking to Canada and the US to make their marks in time) it’s an opportunity for US and UK businesses to learn more about this route now, and potentially get involved in the future.

If explored and opened up, this route could cut down on journey time, money, and the amount of fossil fuel emissions burned.

The opening of this new route is a time for freight company CEOs to look ahead, and visualise the potential to carve out a more efficient and disruptive lane in their sector.

A shorter, less polluting journey would also be a great USP for firms wanting to secure new clients who are seeking a good and ‘green’ corporate social responsibility record, and on top of all that, all clients want a swift and reliable service don’t they?