Theme 1 Changing maritime trade patterns Arctic trade routes January 2024
Summary
TLDRThis video discusses the impact of geopolitical tensions and climate change on maritime trade routes, particularly focusing on the Red Sea and the Panama Canal. It explores the viability of Arctic routes as alternatives due to increasing ice melt, technological advancements, and global shipping challenges. Despite growing trade volumes through the Arctic, significant constraints such as high costs, seasonal limitations, and geopolitical tensions remain. The video also touches on environmental concerns and the potential future of global shipping.
Takeaways
- 🌍 The video discusses the impact of geopolitical issues on maritime choke points, particularly the Red Sea and the Panama Canal, and their effects on global trade.
- 🚢 Shipping companies are seeking alternatives to traditional routes due to instability in the Red Sea, causing a shift in maritime shipping patterns.
- 📉 There has been a significant decline in trade volume through the Panama Canal, contributing to global economic instability.
- 📈 The cost of shipping has increased due to the need for alternative routes, affecting businesses and consumers worldwide.
- ❄️ The Arctic is being considered as a potential alternative route for maritime trade due to climate change and reduced ice coverage.
- 🌡️ Global warming has accelerated the viability of Arctic routes, with the Arctic warming four times faster than the global average.
- 🚀 Technological advancements are making navigation through Arctic waters more feasible, increasing the potential for these routes.
- 📊 Trade volumes through the Arctic routes are increasing, with a 75% increase in the Northern Sea Route between 2014 and 2022.
- ❓ Despite the increase in trade, the Arctic routes still face significant constraints, including high costs, seasonal limitations, and geopolitical tensions.
- 🌱 Environmental concerns are a major obstacle for increased shipping in the Arctic, with potential threats to native species and ecosystems.
Q & A
What is the primary topic of the video script?
-The primary topic of the video script is the impact of geopolitical issues and climate change on maritime choke points, specifically focusing on the Red Sea and the potential of Arctic routes as alternatives for global shipping.
What recent issues have affected maritime shipping in the Red Sea?
-Recent issues affecting maritime shipping in the Red Sea include Houthi attacks on container ships and instability around the Bab-el-Mandeb Strait, which have caused significant disruptions to global trade routes and economies.
How have shipping companies responded to the instability in the Red Sea?
-Shipping companies have responded to the instability in the Red Sea by diverting their routes away from the Suez Canal to the Cape of Good Hope, leading to increased costs and longer transit times.
What are the economic impacts of the disruptions in the Red Sea on global trade?
-The disruptions in the Red Sea have led to higher costs for shipping, affecting supply chains and causing inflationary pressures on businesses and consumers, as seen with companies like Ikea and Next in the UK.
What other maritime choke point has experienced issues affecting global trade volumes?
-The Panama Canal has also experienced issues affecting global trade volumes, with a 30% decline in trade passing through it from November 2023 to January 2024.
Why are Arctic routes being considered as alternatives for global shipping?
-Arctic routes are being considered as alternatives due to the increasing instability in traditional maritime trade routes and the potential for these routes to significantly reduce journey times by up to 40%.
What are the three potential Arctic trade routes mentioned in the script?
-The three potential Arctic trade routes mentioned are the Northern Sea Route, the Northwest Passage, and the Transpolar Sea Route.
How has global warming affected the viability of Arctic shipping routes?
-Global warming has caused the Arctic to warm four times faster than the global average, leading to a reduction in ice coverage and making the Arctic routes more navigable, potentially leading to ice-free summers by the 2040s.
What technological advancements are making Arctic routes more viable for shipping?
-Technological advancements include improved navigation systems and ice-breaking capabilities, which are crucial for navigating the challenging icy conditions in the Arctic.
What are the current limitations and challenges faced by Arctic shipping routes?
-Current limitations and challenges faced by Arctic shipping routes include high seasonality, high costs, extreme weather conditions, the need for specialist ships and expertise, geopolitical tensions, and environmental concerns.
What steps have been taken recently to increase the viability of Arctic shipping routes?
-Recent steps include Russia signing an agreement with DP World to develop Arctic container shipping and the Chinese shipping line completing its first round trip on the Arctic route, indicating increasing interest and investment in these routes.
Outlines
🌍 Geopolitical Impacts on Maritime Trade Routes
This paragraph discusses the effects of geopolitical tensions on maritime trade routes, specifically focusing on the Red Sea and the Suez Canal. The speaker highlights the instability caused by the Houthi attacks on container ships and the impact on global trade. Shipping companies are seeking alternatives, such as rerouting through the Cape of Good Hope, which has economic repercussions including increased fuel costs and inflationary impacts on businesses and consumers. The speaker emphasizes the importance of maritime trade to the global economy and mentions the significant decline in trade volume through the Panama Canal due to climate-related issues, suggesting a broader trend of disruption in maritime trade.
🛳️ Exploring Arctic Shipping Routes as Alternatives
The second paragraph explores the viability of Arctic shipping routes as alternatives to traditional trade routes facing geopolitical and environmental challenges. The speaker outlines three potential Arctic routes: the Northern Sea Route, the Northwest Passage, and the Transpolar Sea Route. These routes are being considered by maritime trade companies due to the increasing disruption in traditional routes. The paragraph discusses how global warming is making these routes more navigable, with the Arctic experiencing ice-free summers by the 2040s. The speaker also mentions technological advancements aiding navigation in these challenging waters and provides examples of recent increases in Arctic trade volumes, including Russia's ambitions to significantly boost its Arctic shipping and collaborations with international logistics companies.
❄️ Challenges and Considerations of Arctic Shipping
The final paragraph delves into the challenges and considerations of using Arctic shipping routes. Despite the potential for reduced journey times, the high costs, seasonal availability, and the need for specialized ships and expertise make these routes less viable. The speaker discusses the high insurance costs due to the risks of navigation and the potential for increased accidents in the region. Additionally, geopolitical tensions, such as disagreements over territorial waters, further complicate the use of Arctic routes. The paragraph concludes with environmental concerns, including the ban on heavy fuel oil usage in the Arctic and the potential impact on native species and local economies, suggesting that while Arctic shipping is becoming more viable, significant constraints remain.
Mindmap
Keywords
💡Maritime Choke Points
💡Red Sea
💡Bab-el-Mandeb Strait
💡Global Economy
💡Supply Chains
💡Panama Canal
💡Arctic Routes
💡Climate Change
💡Geopolitical Tensions
💡Technological Advancements
💡Environmental Concerns
Highlights
Update on geography program focusing on maritime choke points, particularly the Red Sea.
Discussion on the impact of Houthi attacks on container shipping and instability around the Bab-el-Mandeb Strait.
Exploration of how shipping companies are seeking alternatives due to problems in the Red Sea and Suez Canal.
Analysis of the global economic impact, including effects on trade routes and supply chains.
Headlines showcasing the effects on businesses and consumers in Europe and North America.
Seven out of ten of the world's largest shipping companies have suspended transit through the Red Sea.
Previous geography update explainer video on the Panama Canal and its trade issues.
30% decline in trade volume through the Panama Canal from November 2023 to January 2024.
Rising costs of shipping a 40-foot container from China to Northern Europe by 283% since December 2023.
Potential of the Arctic as a maritime trade route and its connection to global trade patterns.
Three potential Arctic trade routes: Northern Sea Route, Northwest Passage, and Transpolar Sea Route.
Historical challenges of Arctic navigation due to climate conditions and ice coverage.
Global warming's impact on Arctic ice coverage and the potential for ice-free summers by the 2040s.
Technological advancements aiding navigation through Arctic waters.
Trade volume through the Northern Sea Route increased by 75% between 2014 and 2022.
Russia's ambition to increase Arctic trade volumes by tenfold by 2035.
Agreement between Russia and DP World to develop Arctic container shipping.
New shipping line's completion of its first round trip on the Arctic route from Shanghai to St. Petersburg.
Constraints on the viability of Arctic routes including seasonality, high costs, and extreme weather.
Geopolitical tensions affecting the use of Arctic routes by Western vessels.
Environmental concerns and the ban on heavy fuel oil usage in the Arctic coming into force in 2029.
Transcripts
hello there everybody and um going to
give you another sort of uh addition to
the geography updates uh videos uh for
the BFI geography program um this one's
following up from the one that was
published last week um which was uh an
update explainer on um issues affecting
um Maritime choke points particular the
Red Sea uh and and again I just want to
sort of um s of follow on another uh
aspect that's connected uh to this um
and you can see on this uh the screen
there the key issues key terms in theme
one of the geography program um that
this might connect to uh and you know
when we look at um you know this is
taken from the the previous video uh
looking at how issues in the Red Sea the
houti attacks on uh container shipping
vessels instability around the Baba MB
straight uh creating great instability
in the global economy Maritime shipping
routes um and um you know the impact
that this is having on the not just
trade routs but the global economy uh as
well and um you you can see that
shipping companies are looking for
Alternatives you can see how you know
shipping has been diverted away from the
Red Sea and the SE Canal to the the Cape
of Good Hope in response to the the the
problems that encountered uh in that
region um and you know this had big
impact on the global economy as well um
these are just a selection of headlines
over the last few weeks of uh how this
um instability in the maritime trade
routes through the SE Canal have
affected Supply chains uh and how this
is starting to be felt as impacts on uh
businesses uh in markets in Europe in
North America as well um
and and you know impacts on consumers
ultimately as well as the the the higher
costs uh
that incurred through altern taking
alternative trade routes that take a
longer time incur more expense terms of
fuel costs and passed on to Consumers uh
so when you got big multinational
companies like Ikea uh and next uh sort
of clothing um of company in the in the
UK commercial retailer um then it's
likely to have an inflationary impact uh
and it just illustrates the importance
of Maritime iation in the global uh
economy uh when you see that sort of
disruption in in one part of the the
chain uh is having such significant
consequences and you know seven out of
10 uh the world's 10 largest shipping
companies have suspended their Transit
through the Red Sea um and it's not just
the problems in the Red Sea that are
creating these issues as well uh earlier
in the the the year uh back in well
September 2023 the academic this
Academic Year um did a geography update
explain a video looking at the Panama
Canal and the issues that were starting
to affect uh volumes of trade going
through the Panama Canal another choke
point in Maritime uh trade uh that
connects the Atlantic and Pacific Oceans
um you know we did that explainer back
in September and you know even since
November 2023 through to to January 2024
where we are now and I'm recording this
there's been a 30% decline in the volume
of trade passing through the Panama
Canal just over the the course of those
few months um so you know there are and
and you know as a result of you know the
the difficulties uh in these routs um
you know you can see the knock on
consequences in the in the costs for
shipping Goods around the world as well
so the cost of uh sending a 40f foot
container from China to nor northern
Europe uh has risen by 283 since
December
2023 um so as a result of these
challenges in global trade uh and the
passage of vessels through different
Maritime trade routes uh and the costs
that are incurred companies are looking
for alternative Alternatives those
established routs um and there are
potentially alternative routes elsewhere
in the world that could cut up to you
know could could Journey enormously 40%
of the length of joury Journeys made via
the sews canal and those routes are
located in the Arctic and this is why
the the previous explainer video then
connects into another uh theme one issue
uh you know and the the Arctic is a
potential Maritime trade route um and an
alternative and could affect uh trade
patterns um now question is it a viable
option you can see that there are three
uh possible trade routes uh varying
viability in the Arctic you've got the
Northern sea route passes along uh sort
of the the coast the northern Coastline
of Russia and and then Scandinavia um
you got the Northwest Passage um you
know passes sort of uh you know through
sort of islands along the coastlines of
of uh the USA and Canada and then you
got the trans pole the sea route that
runs right through the the middle of the
Arctic there as well so you got these
three routs uh and you know how viable
are they as Alternatives and they're
certainly being looked at by
increasingly by uh Maritime trade
companies containership companies um
particularly given as we sort of
explained the the disruption in those
traditional routes that have been
experienced whether that's through um
climate in the Panama Canal and reduced
water levels or whether that's through
geopolitical tensions in the Bab mandb
straight and the sew Canal um so is the
Arctic a viable option for global
Shipping well historically um the major
problem with navigating these roots has
been the the the uh climate conditions
uh that you face there and that much of
the SE is I Bound for large proportions
of the year however uh one of the sort
consequences of of global warming and
the acceleration of global warming uh
and the fact that the Arctic is warming
four times faster than um the the global
average um and that you know since 1978
the ice coverage in the Arctic has
shrunk by roughly 78,000 square
kilometers a year now just to put that
into context that the same as s 31% of
the land mass of Great Britain every
year um sort of an enormous scale uh
changing the the situation in the Arctic
um and you know a study in June 2023
suggested that uh by the 2040s the
Arctic could be experiencing its first
ice free Summers which again would would
make uh The Roots through the Arctic
increasingly viable for for maritime
trade um and another aspect that is
increasing that viability is the way in
which technology is developing you know
it requires a lot of specialist
technology to navigate through these icy
waters and and and challenging uh routs
uh and you know technology in terms of
uh helping navigate the The Roots the
technology involved in the ships is
increasing and improving all the time
particularly as countries are incre
invested in increasing the viability of
these options as well uh and so that
combination of the the the warming of
the Arctic the technological change um
is suggesting that it does become more
viable for global Shipping and the
evidence also suggests that trade
volumes through the Arctic routs are
already increasing as well if we take
the Northern sea route trade volume is
increased by
75% between 2014 and
2022 um and Russia uh who you know
controls you know the vast majority of
that Northern sea in terms of passing
through its its sort of territorial uh
Waters has Ambitions to increase uh
these trade volumes by tenfold by
2035 um again there's a potential link
here to theme two of geography as well
and integration strategies on ways in
which Russia could be looking to to S
promote its level of integration into
the global economy and use the Northern
sea rout as a potential development and
integration strategy uh so with that in
mind in October 2022 Russia signed an
agreement with DP World which is an
emirati logistics company uh to develop
Arctic container shipping um and uh also
in October 2022 the new new shipping
line which is a Chinese Shipping Company
completed its first round trip on the
Arctic route uh a voyage between
Shanghai and St Peter pburg um and so
you know yes it's becoming more viable
the statistics suggest that you know
it's been these roots are been used uh
more frequently um however you know even
though the the statistics suggest that
trade volumes are increasing enormously
through these regions the Arctic routs
still very are very much a s minor
aspect of Maritime trade compared to the
more established routes so in 2022 fewer
than 1700 ships navigate their way
through the Arctic um and you compare
that to other routes over 23,000 ships
pass through the SE canal and over
14,000 ships passing through the Panama
Canal um and you know on the other side
of the argument as well it suggests that
you know the Arctic isn't yet uh a a
truly viable option for Global uh
shipping there are many other
constraints that these routs face um
it's still highly seasonal most Arctic
voyages have been made in the summer uh
the Northwestern passage much more
icebound than the Northern sea route um
and when you take the transpolar sea
route uh that's only navigable using the
the heavy ice breakers and and you know
the enormous costs involved uh in in
that process as well um so it's still
highly seasonal um partly connected to
that uh is incredibly expensive so even
if Journey times could potentially be
reduced by using Arctic Roots compared
to other Maritime trade routs
um the the the the cost increase of
these roots in other aspects um makes it
less viable Insurance costs are very
high for ships and navigating their way
through these Waters or or looking to
Charter ships through these Waters um
that's because of the physical
challenges the poor mapping of the
region in terms of understanding the the
channels that that vessels can navigate
their way through considering the the
sort of draft of each vessel uh as well
in the depth of the waters um um you got
extreme and unpredictable weather so
given those aspects um it's likely that
you would find that there are be more
accidents uh for vessels traveling
through those Waters and if there's
likely to be more accidents then
insurance companies are going to charge
higher premiums so they can sort of uh
negate any cost advantages uh that could
be there through a shorter Journey um
because of the the the higher expenses
um also it's questionable whether it
does save time passing through these um
these routs um a 2023 study um found
that delays uh due to seaf fog uh
accounted for you know around about 25%
of the sailing time along the
Northwestern passage 4 to 11% along the
Northern sea route uh so again the
weather conditions can can take away any
time advantages that that might you know
might be physically a shorter distance
but um it actually still takes a long
time because of the other conditions
that that the vessels face going through
those routs and it requires specialist
ships and expertise you know to be
highly skilled and experienced uh
Navigator um to Pilot your vessels
through these Waters so that costs uh a
lot of money as well um another issue
that limits the viability of uh Arctic
Roots uh as an option for global
Shipping are the geopolitical tensions
that exist here we know that they have
been an issue in the Babel mandb
straight recently in and the seis Canal
but they they exist in these routes too
uh if ships want to pass uh and sail
along the Northern sea route they need
to get uh Russian uh permission to do
that as a result these roots are not
used by Western vessels and that brings
in other aspects of theme one again when
we think about Maritime zones
territorial Waters ezs um they are you
know an issue within the geopolitical
tensions uh in this region um with the
Northwestern passage there are
disagreements between Canada and the US
you know Transit rules and you know
whose waters are passing through um the
transpolar sea route because of its
geographical location would pass through
international waters so potentially if
if that does become a viable route
geopolitical tensions you would expect
wouldn't be as uh
considerable uh as they are for the
other two routs in the Arctic uh so
potentially that you know could diminish
geopolitical tensions as a as a factor
limiting the viability uh of Arctic
roots in the future um and the other
sort of big obstacle the the obvious
environmental concerns of increasing uh
container shipping through uh these
routes um in 2021 the international
Maritime organization a UN agency
adopted a ban on heavy fuel uh oil uh
usage in the Arctic which comes into
force in 2029 uh in the hope that this
will reduce the risk of oil spills and
and pollution uh in uh those Waters um
also the the Associated Air water noise
pollution that comes along with greater
shipping volumes um through this region
threaten native species and and the
locals who rely on them in terms of the
the kind of economies and the structure
of the economies in these Arctic regions
uh as well
so uh currently despite you know the the
amount of trade uh passing through these
regions increasing you know over the
last few years and and given the the
sort of instability that exists in other
Maritime trade routs right now um the
Arctic could increas in become a more
viable option for for global Shipping uh
but the constraints that exist there are
still very significant okay thank you
Ver Más Videos Relacionados
Rough seas ahead: How can global supply chains navigate shipping disruptions?
Why Ships Got So Insanely Big
How Geopolitics will Impact Businesses in 2023? | Mint Explains | Mint
How India is TRAPPING China with its Military STRATEGY? Geopolitics EXPLAINED
The Impact of Geopolitical Risks on Supply Chains
IMF’s Gopinath Says Risk of ‘Severe Oil Shock’ Exists
5.0 / 5 (0 votes)