The Northwest Passage has the potential to disrupt global trade. But there’s a catch

Thanks to global warming, the Northwest Passage is increasingly being seen as an alternative to traditional trade routes such as the Suez Canal. While Arctic seas will certainly become more navigable, there will be challenges and limitations on the types of vessel that can reap the benefits.

What exactly is the NWP? R.K. Headland of the Scott Polar Research Institute in Cambridge defines seven routes or combinations.

While global warming is rapidly eroding sea ice in the Arctic Ocean, all of the routes have variable draft and seasonal access constraints. That hasn’t stopped Arctic pundits and the media in general from expressing their optimism for a flood of commercial shipping taking a short cut between the Pacific and Atlantic oceans.

These predictions are based solely on perceived sailing distance reductions and the loss of ice cover. However, in logistics, it is time rather than distance that matters. The Arctic is not an open water region, where ship speed is up to an operational directive; prudence is essential, given the consistent presence of ice.

The following photograph shows the result of travelling too fast in the Arctic – even when it appears to be open water. In this case, the damage to the vessel was probably the result of a glancing blow with a growler (a piece of ice about the size of a grand piano that’s usually awash and difficult to see).

There are many other considerations. First and foremost are the basic economics of the route. For many potential cargos, the new Panama Canal has eliminated what opportunities there were for maximizing cargo lift – and thus minimizing freight rates.

The “Nordic Orion“, which sailed the route in 2013 with 73,500 tonnes of coal from Vancouver to Pori in Finland, had about a $6.00/tonne margin compared with routing via the old canal. With the new canal, the margin is only $2.00/tonne. The Northern Sea Route (NSR) shows similar margins. Another complication for both the NWP and the NSR is that there are relatively few bulk commodities for which a viable case can be made for an Arctic routing.

Margins for bulk commodities are usually considered relative to landed cost, rather than transit time. After all, what is a day here or there with the delivery of a cargo of coal?

The situation is somewhat different for container shipping, where transit time from factory to user does matter. Hofstra University looked at transit times from Shanghai to key destinations in the U.S. Prince Rupert in British Columbia had the least time to New York: 19 days via ship and rail. More importantly, it was only 16 days to the Midwest distribution hub of Chicago. Estimated time via the all-water NWP to New York was 27 days – one day more than via the Panama Canal.

While ice is a constant in any transit of the NWP, seasonality also plays a role. The route may never be ice free year-round, and at present the window to transit the different choke points is at best six weeks (The most opportune period is probably the first three weeks of September).

It also has to be considered, with climate change, that storms are more frequent and there are ports or other places of refuge. Temperatures are well below freezing from November through April, and in Lancaster Sound, one can expect three months of continuous darkness.

In the absence of bulk cargoes and container shipping, what traffic can one expect to benefit from the NWP? Wagenborg, the Dutch project cargo specialist, has been moving quite a few of its ice class vessels east and west via the Arctic. Eastbound from China, cargoes are primarily carbon anodes for Canadian aluminium smelters; westbound it has been mainly wood pulp from the St Lawrence to the Far East, although they recently shipped several cargoes of lumber from the U.S. Eastern Seaboard to China.

Eight Wagenborg ships used the NWP in 2024, some of which made back-to-back transits. One tanker delivered a fuel cargo from Washington state to a mine site in the western Arctic, and then continued to the Atlantic.

Drawn by the history of the route, the spectacular scenery and exceptional wildlife, expedition cruise ships have been frequent travellers, and eight ships made transits in 2024.

However, the most consistent sailors in the NWP are small craft. Last year, 20 “adventurers” made the trip, some of which were quite large and, technically, small cruise ships (there were three of these mega-yachts in 2024).

Is this the future of the NWP? Or will the route become a genuine game-changer for global trade? Only time will tell.

Christopher Wright is the former president of The Mariport Group Ltd, a marine and port consulting company that he formed in 1989. After retiring in 2013, Wright joined WorleyParsons Canada (now Advisian) as a marine logistics specialist.

He has written two books: “Arctic Cargo; A History of Marine Transportation in Canada’s North” (2016) and “Of Penguins and Polar Bears, a History of Coldwater Cruising” (2020).