MSC Joins Ranks of Global Shippers Swearing Off NSR

On Octo­ber 18, the Swiss-Ital­ian Mediter­ranean Ship­ping Com­pa­ny – the world’s sec­ond-largest ship­ping com­pa­ny by con­tain­er ves­sel capac­i­ty – said it would not use or explore the North­ern Sea Route, join­ing CMA CGM, Maer­sk, and Hapag-Lloyd among the ranks of glob­al ship­ping com­pa­nies that have sworn off using the North­ern Sea Route due to con­cerns about the envi­ron­men­tal impact of increased Arc­tic ship­ping.  Maer­sk is the only one of these com­pa­nies to caveat its rejec­tion of using the North­ern Sea Route, with a spokesman say­ing that the com­pa­ny does not “cur­rent­ly see the NSR as a viable com­mer­cial alter­na­tive to exist­ing east-west routes.”  Togeth­er, these com­pa­nies account for 43.1% of the glob­al con­tain­er ship­ping mar­ket.  Their deci­sion not to use the North­ern Sea Route puts a tem­po­rary damp­en­ing effect on the rev­enue and strate­gic val­ue that Rus­sia hopes to gain from tran­sit fees and increased use of the pas­sage­way for com­merce. 

Envi­ron­men­tal con­cern sur­round­ing the com­mer­cial­iza­tion of the NSR was height­ened after a recent research expe­di­tion found that microplas­tics are present in water and seal­ife sam­ples tak­en along the entire­ty of the route, indi­cat­ing the vul­ner­a­bil­i­ty of the ecosys­tem. While this rev­e­la­tion alone is unlike­ly to have pre­cip­i­tat­ed MSC’s deci­sion, cor­po­ra­tions are con­cerned about the rep­u­ta­tion­al risk of being seen to dis­re­gard the poten­tial for envi­ron­men­tal dam­age caused by their activ­i­ties.