Assessing the viability of Arctic shipping under climate change

: a business case for Hapag-Lloyd

Abstract

Maritime shipping is increasingly affected by disruptions, especially due to the growing vulnerability of key maritime chokepoints. Large trade volumes are impacted as services from Asia to Europe are forced to re-route via much longer routes around the Cape of Good Hope, following ongoing rebel attacks leaving the Suez Canal non-navigable. At the same time, climate change is altering maritime conditions, potentially opening the Arctic as a new trade corridor. This thesis investigates the feasibility and economic viability of adopting Arctic routes for Hapag-Lloyd AG’s Asia-Europe liner services over the next two decades, focusing on operational cost efficiency and navigational risk. Projections of sea ice conditions under a best-and worst-case climate scenario were translated into navigational risk indices and a least-cost path algorithm was applied to compute the safest and most cost-effective Arctic routes. The feasible Arctic passages were then compared against the traditional Suez Canal and Cape of Good Hope routes in terms of cost-competitiveness. Results show that while Arctic routes could offer substantial distance and absolute cost savings, Hapag-Lloyd AG’s current fleet - composed entirely of Open Water vessels - cannot safely access these routes under current and projected ice conditions. Polar Class vessels would offer sufficient ice navigation capability, but their lower capacity leads to unfavorable per-unit (TEU) economics. Additionally, seasonally limited and volatile navigable periods limit the strategic relevance of the Arctic corridor. While regular navigation on the Arctic routes is judged non-viable for Hapag-Lloyd AG, the trend towards improving accessibility highlights the need for continuous monitoring.

Date of Award	25 Jun 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Miguel de Oliveiros Vieira de Albergaria e Castro Nogueira (Supervisor)