Could an Arctic shipping route transform global trade?

China, the world's second-largest economy, sent several cargo ships through an Arctic route over the weekend, along waters hugging Russia's northern coast.

The two countries are trying out a path that could become a new shipping lane aside from southern routes, such as the one through the Suez Canal, that's been used for more than a century to move goods between Asia and Europe.

Alice Hancock, shipping and industry correspondent at the Financial Times, covered this story. She recently joined Marketplace correspondent Nova Safo. The following is an edited transcript of their conversation.

Nova Safo: So, can you describe for us this route? Where is it exactly, and what [does] traversing it look like?

Alice Hancock: So, this route, it stretches from Ningbo, which is on China's East Coast, and it goes all the way around the top of Russia — so all the way along through the Arctic — and then should arrive in Felixstowe in the U.K., which is the U.K.'s biggest port.

Safo: And now, we have several vessels traversing this route a lot more than, as I understand it, ever before. Why?

Hancock: I think more people are using it — and we saw a record number using the route last summer — because it avoids all these choke points that have become much better known to us this year, thanks to the conflict in the Middle East — you know, things like the Suez Canal, the Strait of Hormuz, the Panama Canal, which of course at the moment is having issues due to drought. So especially for Chinese companies who might want to avoid choke points that are controlled by the U.S. or by the U.S.'s allies, the Arctic becomes a more interesting prospect.

Safo: There's all these kind of understandable reasons why a shipper might want to go there — you know, bypassing the choke points as you mentioned; it's faster because it's more of a direct route. And yet, a lot of European shipping companies like Maersk say they are ruling it out. Why is that?

Hancock: Yeah, it's funny because actually Maersk was the first to send a container ship through the Arctic route back in 2018, and now it's signed an agreement with quite a few European companies to say that they won't use the Arctic route. And of course, that's because it has an incredibly fragile ecosystem that's very important. So there's a lot of concern that if you increase shipping through the Arctic, that will send some of these natural systems off balance. And then there's also a question of security. You know, if Russia is the one that is sending out the licenses and all this kind of thing, is it really a safer route?

There's also a kind of third component to that, which is there's not much demand, to be honest, from customers to go via the Arctic. Yes, it cuts, as you say, the shipping time down; I think it's by about half, in fact, if you're going between Ningbo and Felixstowe. But I think at the moment customers are so focused on getting their cargo there safely that actually the Arctic doesn't present necessarily the more attractive option.

Safo: So something to watch, but not yet a major component in terms of the global shipping industry?

Hancock: No, I think in sort of geopolitical terms, it's very interesting. And of course, this weekly service that Sea Legend, the Chinese container shipping company, has opened is a very interesting move, and we may yet see more of it. But certainly sitting here in Europe, in London, I don't think we're going to start seeing lots of ships arriving in the U.K. from the Arctic. But of course, you know, if the ice melt really does become significant, then it could well move up in people's minds as an interesting way to literally get around the top of the world and get a shortcut.