During a National Assembly audit by the Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee, concerns were raised about the economic viability of the Arctic route, considering operational costs, cargo volume, and insurance fees.
Minister of Oceans and Fisheries Hwang Jong-woo responded to a query from lawmaker Kim Yong-tae on October 12, stating, "I believe we can secure economic viability around 2040."
Lawmaker Kim pointed to a report commissioned by the Ministry of Oceans and Fisheries, arguing that the Arctic route is not economically sufficient. He noted, "Even under very favorable conditions, the analysis shows that in the 2040s, it will be less economical than routes using the Suez Canal," and emphasized the need for a comprehensive review of diplomatic, security, economic, and political factors.
Questions about the operational costs of the Arctic route continued. Kim highlighted that next year's budget allocates 622.8 billion won, with a round trip for a single vessel to Europe costing 7.63 billion won, including 1.359 billion won for icebreaking services. He also inquired whether the institutions receiving payments for icebreaking services are subject to U.S. sanctions.
Minister Hwang explained that the trial operations were conducted with consideration of the risks associated with sanctions against Russia. He stated, "During summer operations, we do not use icebreakers, and there are no trial operations in winter," adding that they have taken into account the risks related to U.S. sanctions against Russia and Rosatom, ensuring that no funds are directed to sanctioned entities.
Another lawmaker from the same party, Lee Sang-hwi, also questioned the economic viability of the Arctic route. Lee, who has 16 years of experience in the shipping and logistics industry, pointed out that the Arctic route has been considered multiple times in the past but has been postponed due to worsening weather conditions, insufficient cargo volume, icebreaking systems, and issues related to Russian navigation.
Lee noted that while local governments are eager to promote the Arctic route as a project that guarantees economic benefits, it is essential to evaluate the actual operating conditions and costs. He specifically mentioned that the cargo capacity of trial operation vessels remains an unresolved issue regarding cargo volume.
He also compared operational costs, stating that using the Arctic route incurs approximately $3 million in costs from July to September, while the Suez Canal route costs about $3.82 million. However, he pointed out that additional costs for icebreaking and special insurance premiums arise with the Arctic route, indicating that the economic viability cannot be judged solely based on reduced travel distance, as costs can vary depending on the season and operational conditions.
Lawmaker Kim also inquired about the possibility of linking the Arctic route with North Korea's Rajin Port and the Tumen River. In response, Minister Hwang stated, "There is no need for the Tumen River or Rajin Port to travel from Busan to Europe via the Arctic route," and added, "We are not considering any cooperation or linkage with North Korea."
* This article has been translated by AI.
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