Hyundai Merchant considers exploring Arctic routes

By Kang Seung-woo

Hyundai Merchant Marine, the nation's largest container carrier, is seeking to sail through Arctic Ocean routes, north of Russia.

According to the shipping industry, Friday, the Seoul-based company is considering trial runs as early as 2020. If successful, it would be the first time for a Korean player in the sector to carry cargo through the maritime routes on a regular basis.

"Hyundai is expected to explore the routes, using 2,500 to 3,500 twenty-foot equivalent unit (TEU) ships," an industry source said.

Korean ships, now using the conventional shipping route through the Indian Ocean and Suez Canal to reach Europe, take about 40 days from Busan to Rotterdam, the Netherlands. But the Arctic routes are expected to shorten travel time to 30 days, substantially cutting shipping costs.

Currently, the routes can only be used between July and October and vessels need help from icebreakers, but it is expected to be available all year round by 2030 due to the thawing of ice sheets.

Given the need for ice-breakers, the company is also looking at using an ice-breaking class vessel, according to the source.

Since 2013, a few Korean logistics companies, including Hyundai Glovis and CJ Korea Express, have attempted to navigate the routes for shorter and cheaper shipments.

Hyundai's bid comes as the Moon Jae-in administration is seeking to intensify its cooperation with Russia in a variety of economic projects, including a joint development of the Arctic Ocean shipping routes.

Moon met with Russian President Vladimir Putin last month on the sidelines of the G20 summit in Germany and agreed on this.

In addition, the development plan is likely to be accelerated next month when the Eastern Economic Forum is held in Vladivostok on Sept. 6 and 7, which many government officials will attend it.

"To raise profitability from the Arctic routes, we will need help from Russia, which owns the most ice-breakers in the world," an industry official said.

"A joint development between Korea and Russia is expected to generate big synergy."

Hyundai is said to be reviewing whether a trial operation will be available in three to four years.

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