Economic and environmental impacts of Arctic shipping: A probabilistic approach

Photo : Economic and environmental impacts of Arctic shipping: A probabilistic approach

Arctic shipping is controversial due to the trade-off between its positive economic impact and its negative environmental effects. As both effects are affected by the uncertainty related to sailing conditions encountered along the route, we develop a model that estimates how ice conditions change the probability of blockage along the route and play on the economic and environmental attractiveness of the Northern Sea Route. The model is applied to a business case that compares the performance of two ice-class oil tankers (1A and 1AS) that use Marine Gas or Low Sulfur Fuel, and considers historical data on daily ice thickness records (2006–2016) for the probability of blockage. Our main finding is that the probability of blockage affects the choice of the optimal vessel to deploy along the Arctic Route as well as the effectiveness of various environmental policy options.

Discover the research of Olivier Faury.

Author(s)
  • Photo :

    Olivier Faury Olivier FAURY is an Associate Professor of Supply Chain Management and Logistics. He joined EM Normandie in 2016. He has a PhD in maritime economics from KEDGE Business School, Marseille, awarded in 2016. His thesis is an economic analysis of the Northern Sea Route. His research interests are how risk management, port development and the legal framework affect the attractiveness of Arctic shipping lanes for cruise tourism, container traffic and bulk shipping. Prior to his doctorate, he worked for 10 years for various freight companies in France and Morocco in sales and management roles.

Photo : Webinar: changing paradigms of global supply chains

Webinar: changing paradigms of global supply chains

Last two years of pandemic triggered significant structural changes, irrespective of the industry and geographies. There are specific patterns emerging in the various facets of supply chains including procurement, manufacturing, and logistics. The proposed seminar will provide an overview on those latest developments and their business impact. If you want to learn more about this […]

Read More

Photo : Global connectivity and local clustering of “Made-in-China” Aircraft

Global connectivity and local clustering of “Made-in-China” Aircraft

Characterized by world-leading economic growth, rising middle class with increasing income, increasing market openness to FDI, and strong policy support from the government, China fuels global investors with large market volume and fast-growing potential in the aerospace sector.  As the world’s second-largest civil aviation market, China maintains long-term above-average growth in the aerospace industry. According […]

Read More