GFML 3023 SEA TRANSPORTATION

(GROUP A)

GROUP PROJECT PAPER

LECTURER:

DR. ALISHA BINTI ISMAIL

PREPARED BY: STEVEDORE GROUP

NO. NAME MATRIC NUMBER

1. NURUL WAHIDA BINTI HASNOL 269988

2. NAJWA SHUHADA BT MOHD NASIR 271848

3. NURAQILAH BT FUAD SALLEHUDDIN 272738

4. NUR SYAFIAH BT MAD ROSLI 273370

5. NURUL AMIRAH BT MOHD AZIZON 273428

SUBMISSION DATE: 6/2/2022

 TABLE OF CONTENT

1.0 INTRODUCTION........................................................................................................1
2.0 PROBLEM STATEMENT.............................................................................................3
3.0 LITERATURE REVIEW................................................................................................4
3.1 Maiden Voyage.....................................................................................................4
3.2 Transportation route............................................................................................4
3.2.1 Suez Canal.....................................................................................................5
3.2.2 Northern Sea Route (NSR)..............................................................................5
3.2.3 Trans-Siberian Railway...................................................................................6
3.3 Northern Asia and Northern Europe.....................................................................6
4.0 ANALYSIS.................................................................................................................7
4.1 Transsiberian Railway...........................................................................................7
4.1.1 Facilities.........................................................................................................7
4.1.2 Economic.......................................................................................................9
4.1.3 Time Taken, Speed and Distance....................................................................9
4.1.4 Volume Capacity..........................................................................................10
4.1.5 Weather and Environment...........................................................................10
4.2 Northern Sea Route............................................................................................11
4.2.1 Facilities.......................................................................................................11
4.2.2 Economic.....................................................................................................11
4.2.3 Time Taken, Speed and Distance..................................................................12
4.2.4 Volume Capacity and Cost............................................................................12
4.2.5 Weather and Environment...........................................................................13
4.3 Suez Canal..........................................................................................................13
4.3.1 Facilities.......................................................................................................14
4.3.2 Economic.....................................................................................................14
4.3.3 Time Taken, Speed and Distance..................................................................14
4.3.4 Volume Capacity..........................................................................................15
4.3.5 Weather and Environment...........................................................................15
5.0 DISCUSSION...........................................................................................................16
5.1 Facilities..............................................................................................................16
 5.2 Economic............................................................................................................19
5.3 Time taken, Speed, and Distance........................................................................20
5.4 Volume Capacity and Cost..................................................................................20
5.5 Weather and Environment..................................................................................21
5.6 Most efficient route............................................................................................22
6.0 CONCLUSION..........................................................................................................22
7.0 RECOMMENDATION...............................................................................................23
1.0 INTRODUCTION

Transportation in a supply chain describes the movement of products from one

location to another, which begins at the establishment of the supply chain when resources
arrive at warehouses and continues all the way to the end user, with the customer's
purchase carried straight to their door. Since transportation is so crucial, supply chain
managers should investigate it in their supply chain operations. “Carriers, shippers, vendors,
wholesale and others in the supply chain are involved about the container shipping logistics
chain because rail, highway and port procedures affect their profits and costs,” expert write
in the report determining the transportation system from a supply chain perspective,
emphasizing the importance of transportation to a wide range of industries (Mortson,
2020). NOHAX is a new shipping line company where people need to decide for
transportation routes, whether to use the water transportation by Royal Road (Suez Canal)
or Northern Sea Route (NSR), or via Trans-siberian railway.

The Suez Canal is a manufactured canal that runs through Egypt's Isthmus of Suez
from north to south. The Suez Canal connects the Mediterranean and Red Seas, offering the
fastest maritime route from Europe to Asia. After its opening in 1869, it developed one of
the world's busiest nautical routes. The Suez Canal runs 120 miles from Port Said on Egypt's
Mediterranean Sea to the Egyptian city of Suez (located on the northern shores of the Gulf
of Suez). The canal connects the majority of Egypt to the Sinai Peninsula. It took ten years to
construct (Editors, 2022). When it initially opened in 1869, the canal was only 8 metres (26
feet) deep, 22 metres (72 feet) broad at the depths, and 61 to 91 metres (200 to 300 feet)
width at the top. Crossing bays were created every 8 to 10 kilometres to allow ships to pass
one another (5 to 6 miles). The extraction and dredge of 74 million cubic metres (97 million
cubic yards) of materials was required for construction. The narrowness and tortuousness of
the canal resulted in around 3,000 ship groundings between 1870 and 1884. Major
renovations started in 1876, although by the 1960s, the canal had a minimum width of 55
metres (179 feet), a depth of 10 metres (33 feet) along its cliffs, and a channel depth of 12
metres (40 feet) at sea level. Passing bays were massively increased and new bays were
constructed during that time, tanker anchorages in Lake Timsah were deepened, bypasses

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were built in the Bitter Lakes and at Al-Ball, stone or cement cladding and metal placing for

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bank defence were almost completely fulfilled in areas extremely susceptible to erosion and
new berths were dug at Port Said to facilitate convoy grouping (Smith, 2021). Overall, an
estimate of 50 ships sail over the river daily, carrying over 300 million tons of cargo each
year. The Egyptian government oversaw an $8 billion enlargement project in 2014, which
enlarged the breadth of the Suez Canal from 61 metres to 312 metres across a 21-mile
length. The process took a year to accomplish, and as a consequence, ships could travel in
both directions at the same time (Editors, 2022).

The Northern Sea Route (NSR) is a shipping channel connecting the Atlantic and
Pacific Oceans that runs through the Russian coasts of Siberia and the Far East, passing
through five Arctic Seas which the Chukchi Sea, the Barents Sea, the East Siberian Sea, the
Kara Sea and the Laptev Sea. The part of the Northeast Passage between the Kara and
Bering straits that is icebound for the majority of the year is the hardest for ships to cross.
However, the Soviet Union and subsequently Russia created and maintained a passable
canal around 3,500 miles or 5,600 kilometres in length, the mileage varies greatly depending
on the route taken through the most difficult portion of the journey (Pletcher, 2021). By
2020, the Northern High Logistics Center (CHNL) logistics foundation in Norway has
documented 62 full shipment voyages through the North Sea Route. In comparison, there
were 37 shipments in 2019. The number of ships utilising the North Sea Route grew this
year from 277 to 331, according to CHNL. The top three countries using the Arctic route are
Russia, China, and Canada, with cargoes mostly consisting of iron ore, oil, and liquefied
natural gas (Briefing, 2020).

The Trans-Siberian Railway is one of modern history's most amazing pieces of

technology. It is the world's longest train line, having been built in 1891 and finalised 100
years ago today (per Google Doodle). The 5,772-mile railroad connects Moscow to
Vladivostok on the Pacific coast. It was also the inspiration for the Russo-Japanese War,
which began in 1904 and culminated in one of Russia's most catastrophic defeats. The
conflict was the first time in recent history that non-Western countries defeated Western
states, and it aided in the rise of competition. The conflict between the United States and
Japan culminated with the attack on Pearl Harbor (Beauchamp, 2016). Railway construction

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began in 1891 in numerous sections of the west (Moscow) and east (Vladivostok), as well as
via transitional routes via the Mid-Siberian Railway, the Transbicycle Railway, and other
routes. As a result,

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the Trans-Siberian Railway had two dates of completion which in 1904 all segments from
Moscow to Vladivostok were joined and finished operating through Manchuria, and in 1916
a full-fledged Trans-Siberian Railway was ultimately completed within Russian territory.
(Britannica, 2022). The Trans-Siberian was the most amazing accomplishment of a time
when Russia's rail network extended from 1,000 miles in 1860 to 45,000 miles by 1917. The
Trans- Siberian Railway now delivers over 200,000 containers to Europe each year. Russian
Railways intends to increase the amount of container traffic in Trans-Siberia, building a
specialized train fleet and enhancing terminal facilities by a factor of three to four. By 2010,
the volume of commerce between Russia and China might exceed 60 million tons (54 million
tons), with the Trans-Siberian railway carrying the majority of it (Britannica, 2022).

2.0 PROBLEM STATEMENT

Some operations in the supply chain have just as much influence on each business as
the means of transportation. The delivery technique ensures delivery to and from the
facility runs smoothly and arrives at the destination on time. Since transportation is
important in a company’s performance, it must be included in the supply chain
management plan. Deciding on a route is also important in determining which order is sent
on which route and in what order. Time is precious and a route planning system may
significantly minimize the amount of time it takes to organized the transportation routine.
Route planning systems not only save mileage but they also assist to reduce carbon
emissions, asset utilization, fuel consumption and customer service (Salter, 2015). Route
planning is essential for boosting financial performance and customer satisfaction. The
planning process not only enhances daily delivery performance, but it also assists in
determining the best delivery methods to apply and the possible effect of change on the
organization. Many businesses employ route planning as part of their continuous
improvement initiatives to identify the areas where changes to procedures, rules, and driver
behavior for example, can result in considerable cost savings and substantial improvements
in customer experience. The aim of this research is to investigate the three transportation
options and to recommend which route will be the best choice for the NOHAX maiden
voyage transporting the container load from Northern Asia to Northern Europe.

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3.0 LITERATURE REVIEW

The key objective of this study is to analyze the three transportation routes and to
propose which route will be the best choice for the NOHAX maiden voyage in order to
transport the container shipment from Northern Asia to Northern Europe.

3.1 Maiden Voyage

According to Cambridge Dictionary, a maiden voyage is a ship's or a

spacecraft's first journey. The term "maiden voyage" refers to a ship, airplane, or
other moving vehicle's first excursion out to sea, into the sky, or overland for a
specific purpose. It may also be used to describe a person's first encounter with
something. Since the mid-1500s, the phrase "maiden" has been used to describe
"the first time doing anything." However, it wasn't until 1901 that the term "maiden
voyage" was used to denote the first time a ship set sail for its original purpose (7esl,
2020). The other term for the maiden voyage is the first journey or first voyage
(Word Hippo, 2020).

3.2 Transportation route

In this research, there will be three transportation routes that will be

discussed in proposing the best route for NOHAX to transport the container
shipment. The transportation routes are Suez Canal, Northern Sea Route (NSR), and
Trans-Siberian Railway (TSR). Shipments via truck, ship, train, and plane — often
known as road, marine, rail, and air shipments — are the four basic modes of
transportation in logistics (Purolator International, 2020). According to Britannia
Encyclopedia (2017), a transportation route is a path that a regular flow of persons
or goods travels. On the Earth's curving surface, it should ideally go the shortest
distance possible, which is a straight line or a big circle. Routes may deviate from
straight lines in order to connect to intermediate traffic sources or avoid crossing
particular political borders.

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3.2.1 Suez Canal

According to Dr. Cuffe H., The Suez Canal may be traced back to the
pharaonic period, when canals were built. Sity I (1310 BC), Necho II (610 BC),
King Darius (522 BC), Ptolemy II (285 BC), Emperor Trajan (117 AD), and Amro
Ibn Elass (640 AD) reopened and enlarged this abandoned canal that
connected the Mediterranean Sea and the Red Sea with the Nile River. BBC
News (2021) stated that The Isthmus of Suez is an artificial trade canal in
Egypt that connects the Mediterranean Sea to the Red Sea and divides Africa
and Asia. According to Cecere L. (2021), the Suez Canal is a vital supply chain
link, transporting 13.5 percent of global freight. Igor R. (2020) examined the
marine freight flow between Europe and Asia, as well as the Suez Canal's
projected growth directions. Yiru (2016) said that the expenses of tankers
utilizing the Arctic Route against the standard Suez Canal were compared,
and it was shown that small tankers favour the Northern Sea Route. Halvor S.
(2011) analyzed the rates of bulkers travelling from the Suez Canal to the
Northern Sea Routes, discovering that summer journeys may be profitable for
bulkers. According to Notteboom, Pallis & Rodrigue (2022), the Suez route
connects Asia with Europe, passing through the Strait of Malacca, Bab el-
Mandab, the Suez Canal, and the Strait of Gibraltar.

3.2.2 Northern Sea Route (NSR)

According to the Federal Law of the Russian Federation, the Northern

Sea Route is defined as “the historic national transportation line of the
Russian Federation in the Arctic zone”. The Northern Sea Route is one of the
longest and most significant marine transport routes in the Russian
Federation (Gavrilov, 2020). Lee & Song (2014) also agree with the NSR's
economic viability, claiming that the NSR has advantageous economic
benefits in terms of distance and time in their analysis. However, as they
conclude, their study has a significant flaw: it does not take into account the
NSR toll cost levied by Russia's breaking-ice services. According to Pierre and

7
Olivier (2015), the use of NSR for bulk shipping remains "risky" because of
too harsh weather

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 conditions and the significant risk of maritime contamination. According to
Liu & Kronbak (2010), NSR has gotten a lot of interest in recent years since it
saves up to 40% of the sailing distance between Yokohama and Rotterdam as
compared to the typical Suez Canal route. Liu & Kronbak (2010) state in their
case study that the NSR is "profitable, especially when it is navigable for
extended periods of time." Due to the vulnerable Arctic ecosystem, Zhuravel
& Smirnov (2015) conclude that a significant amount of environmental study
must be completed prior to the initiation of commercial use of the NSR as a
major international transit route.

3.2.3 Trans-Siberian Railway (TSR)

According to Kohn and Ragozin (2010), the Trans–Siberian Railway

(TSR) is a railway network that connects Western Russia with Russia's the Far
East. It is the world's longest railway line, stretching over 9,289 kilometres
(5,772 miles) from Russia's capital, Moscow, to Vladivostok, which is located
in the Sea of Japan (Thomas, Mccrohan, Bryn & Daniel (2019). According to
the Siberian Times (2017), as of 2021, the railway system is still expanding,
with connecting trains heading into Asia, specifically Mongolia, China, and
North Korea. The Trans-Siberian Railway (TSR)'s connectivity between the Far
East Port and the EU can attract more freight and boost competitiveness over
alternative transport routes such as the Suez Canal. The high cargo volume, in
particular, contributes to economies of scale, resulting in rail networks' cost
competitiveness (Woodburn, 2007). Kim (2018) said that TSR is around 6,213
miles shorter and has a 20-day lead time than the Suez Canal. The Trans-
Siberian Railway (TSR), which runs from Vladivostok to Moscow, is an
alternate route that connects Europe and the Pacific Ocean (Huh et al., 2012).

3.3 Northern Asia and Northern Europe

Northeast Asia is a word that is commonly used to describe an area that

encompasses Northern China (Lynn, 2011). Northeast Asia includes Mongolia,

9
Russian Far East, Japan, South Korea, and North Korea, among other countries and
territories.

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 (Rozman, 2004). According to Ivanov & Smith (1999), the region is defined by the
Economic Research Institute for Northeast Asia as Japan, Mongolia, Russia, China,
and Korea. Discussions of the region also include the Sea of Okhotsk, the Yellow Sea,
and the East China Sea. Russia, Mongolia, Japan, Korea, and China make up the
Northeast Asia area, according to the Economic Research Institute. The East China
Sea, the Sea of Okhotsk, and The Yellow Sea are also discussed in relation to the
region. Although the scope of Northern Europe is defined differently, according to
the United States geosphere for Europe, Northern Europe is made up of ten
sovereign nations. Scandinavia, the British Isles, and the Baltic area are the three
regions that make up these countries (Illsley, 2020).

4.0 ANALYSIS

4.1 Transsiberian Railway

Trans-Siberian railways are the most popular mode of cargo shipment
transport especially from Asian to Europe region. It is mostly used by international
trade to transport their cargo with lower cost and faster time intake. The specific
region for NOHAX Company is from Northern Asia to Northern Europe that are
required by using the Transsiberian railway. Finland is one of the Northern European
countries that used this mode of transportation for the cargo shipments. The new
routes being introduced for the Transsiberian railway through Kazakhstan which
shorten the time intake for the cargo shipment. Moreover, the routes also are
connecting other Northern Europe countries including Sweden, Norway and
Denmark. The route's connection gave them an advantage in terms of cost reduction
as they decrease the time intake. Other than that, the development of the
connection routes connecting Poland and the United Kingdom that include Northern
Europe countries. (Hilmola, 2018)

4.1.1 Facilities
The technical and facilities that are being provided at Transsiberian
railway are being improved from time to time as it requires a lot of research

11
and development. The Transsiberian railway requires a different size of
railway gauge according to the country.

Country Railway Gauge Size

(mm)

China, Western Europe 1435

Russia, Mongolia, Central Asia, Finland 1520

Finland 1524

Table 1: Railway Gauge Size

The standard railway gauge size that is being used by China and
Western Europe is 1435mm. The 1520mm is a broad gauge that is usually
used by Russia, Mongolia and Finland while Finland sometimes used the
1524mm gauge size. It is a challenge to change the gauge size using the
equipment that is being provided to match from Northern Asia to Northern
Europe. They need to change the gauge from time to time when they reach
different countries that require different sizes of gauge.
The documentation and all the related agreements are needed to do
the cargo shipments for the smooth delivery from Northern Asian to
Northern Europe. All the practises of customs, international railway transport
documentation are required from the shipping company. The procedure can
be followed including the material handling while delivering the process
cargo shipment and the logistics information management. The gauge
changes also are included in the documentation for the purpose of recording
all the data information.
The Russian border has built a warehouse for the storage goods that
are being delivered from Northern Europe. The warehouses are useful for the

12
cargo goods to be kept in there as there is safety and protection required.
The goods can be stored in the warehouse and it will be shipped out when
there’s an order from any country. The warehouses are user friendly and it
makes the delivery of cargo shipments become easier. (Tsuji, 2002)

4.1.2 Economic
The support from the government such as giving out subsidies can
help Northern Asian and Northern Europe to do the cargo shipments.
Subsidies can be obtained from any programme that is made by the countries
to support the uses of the Transsiberian railway in their country. By doing so,
it can increase the level of competitiveness between the railway
transportation mode and maritime transportation mode as these two modes
are the lowest cost than the other transportation modes. With subsidies can
attract the cargo shipments from other countries to make use of the railway
service provided.
In terms of tariff, Northern Asia, which is Russian, has a lower tariff. It
is beneficial for the NOHAX Company to use the Transsiberian railway to
deliver their cargo shipment from Northern Asian to Northern Europe. On top
of that, Transsiberian railways have flexible tariff settings to keep their level
of competitiveness between the maritime transportation modes. Tariff is the
most when it involves more than one country especially in business. Most
countries prefer lower tariffs from the countries as the cost of tariff can be
more expensive than the cost of the shipment. (Tsuji, 2013)

4.1.3 Time Taken, Speed and Distance

Route Length Lead Time

(nautical miles) (days)

Transsiberian Railway 5,375 18-20 days

(Northern Asia – Northern Europe)

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Table 2: Length and Lead Time of Transsiberian Railway

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The time taken using the Transsiberian railway for cargo shipment from
Northern Asia to Northern Europe requires 18 to 20 days of delivery time.
While the length between Northern Asia to Northern Europe is 5,375 nautical
miles using the railway.
Using the railway has advantages in speed level. The Transsiberian
railway can increase the speed level for the cargo shipment arriving at the
final destination at the right time. It is because there will be no traffic
congestion as the railway routes have their own rail other than maritime
transportation, road transportation and air transportation. The average
speed that these workers can speed up to is 54 knots (Verny & Grigentin,
Container shipping on the Northern Sea Route, 2009). The more cargo they
receive, the more profits they will earn (Rodrigue, 2020).

4.1.4 Volume Capacity

The carrying capacity is 1,540 tons capacity supply at 1,980 TEU . It
can reach 50,000- 60,000 TEU a year in both directions from Northern Asia to
Northern Europe. The cost for using the route is $1,800 up to $2,200 per TEU.
But they can be a problem if they are returned with empty cargo as the
empty cargo is not calculated in the profit, same way as maritime
transportation. They need to increase their frequency to search for the new
opportunities for the Northern Europe products to be delivered as they are
one of the growing regions.

4.1.5 Weather and Environment

Transsiberian railways does have a problem in terms of weather but
in winter certain types of cargo cannot be accepted as some cargo require
different temperatures. For the environment, the government of Russia is
tightening the rules for environmental protection.

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4.2 Northern Sea Route
The Northern Sea Route is the shortest way of water route for NOHAX
Company to ship their cargo shipment from Northern Asia to Northern Europe. Even
Though it is the shortest but the northern sea route is at the Arctic Ocean which is
surrounded by ice and even worse is an iceberg.

4.2.1 Facilities
In the northern sea route, they have poor condition of facilities as
they are in the Arctic Ocean. The facilities that are provided are limited
especially when it comes to the communication because the communication
service occurs in some places that are close to the cell phone tower only.
Other than that, the facilities that are being provided at the northern sea
route are the ice breaking fleet, port infrastructure, security requirements
and technical safety. (Skripnuk, 2020)

4.2.2 Economic
The Russian government wants to make the Northern Sea Route as an
efficient operating waterway for the development of the Arctic Route. They
tend to restructure the activities to enhance the northern sea route. The
development of the northern sea route will increase the economic level of
the country. For instance the Northern Sea Route can turn into an
international transport corridor for other countries getting the cargo
shipment service.
The laws and regulations that are established by the Russian
Federation are that the vessels need to have certified for the ice resistance
and for the convoys vessels they need to be followed by the nuclear power
ice breaker. It is because of the condition of the Arctic Ocean. The Russian
Marine Register of Shipping for vessels will approve the application from the
shipping line before they use the route.

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4.2.3 Time Taken, Speed and Distance

Route Length Lead Time

(nautical miles) (days)

Northern Sea Route 7,700 18-20 days

(Northern Asia – Northern Europe)

Table 3: Length and Lead Time of Northern Sea Route

The time taken using the Northern Sea Route from Northern Asia to
Northern Europe is 18 to 20 days while the length is 7,700 nautical miles. The
lead time can increase if the weather is not good, especially when the ice
becomes thicker. The speed for the vessels is average which is around 17 to
24 knots and not exceed 24 knots the maximum speed for a vessel's cargo.

4.2.4 Volume Capacity and Cost

The volume of the cargo container per year keeps increasing year by
year. The carrying capacity is 39,000 tons with capacity supply at 72,000 TEU.
For the Northern Sea Route, the ice breaking escort needs to be paid by the
shipping line. The fees depend on the size of the ship, the level of support
needed and also the voyage route. The cost is $2,500 to $2,800 per TEU.
Other than the cost of an ice breaker, there are also additional costs for the
route recommendation if the sea turns into ice, the salary of the helmsman,
special vessel steerage and many more. (Bouchalis, 2022)

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 4.2.5 Weather and Environment

Figure 1: Arctic Ocean Sea Surface Temperature Anomalies (1980-2016)

Northern Sea Routes are mostly covered with ice because of the
geographical area which is located in the Arctic Ocean. The figure shows the
reduction gap of the temperature at the Arctic Ocean from 1980 to 2016. The
ice thickness and ice coverage area form in a short time. Because of that the
shipping line needs to be alert about the marine forecast for them to prevent
any risk. The minimum ice coverage is between 3.4 million square kilometres
to 4.6 million square kilometres.
The hydrocarbons that occur at the northern sea route due to the
over- mining activities lead to global warming and also melting the ice at the
Arctic Ocean. It has a bad impact on the environment and can produce
pollution. But the Northern Sea Route has a new initiative to reduce the
consumption of carbon dioxide. On top of that, the pipelines at the Arctic
Ocean are being placed above the ground to prevent damage to the
ecosystem.

4.3 Suez Canal

Suez Canal is the biggest sea route transport that connects the
Mediterranean to the Red Sea. The Suez Canal also links Asia and Europe that
include the specific connection from Northern Asia to Northern Europe too. It is the

18
busiest sea route that attracts all ships all over the world to get their cargo goods
being transported with the shortest connection.

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4.3.1 Facilities
The Suez Canal has created an industrial center, seaports, technology
valley and a supply and logistics area to improve the facilities at the Suez
Canal. Other than that, the Egyptian government has expanded the Suez
Canal to increase the number of container cargo vessels which make the
routes becoming two ways. To increase the passage and efficiency of the
Suez Canal, they expand the global transport infrastructure, especially
maritime components. (Rusinov, 2021)

4.3.2 Economic
Suez Canal is facing an issue which is a mega vessel cargo container
getting stuck between the canal. Because of those incidents, the logjams
occur at the canal as the other vessels cannot pass through the routes.
Moreover, the incidents are making the global trade growth slow as the other
routes are quite far to reach in the meantime. It is a risk for the global
economy especially since it happened during the pandemic of covid-19 as
they lack crews to handle the situation. (Welle, 2022)
On top of that, the rules and regulations are being ruled up by the
Egyptian court to the responsible organisation that led to the incidents. The
organisation needs to pay around $900 million for the compensation as the
incidents make others vessel loss and exceed their actual time to deliver the
cargo container. The ships are also being controlled by the local pilot through
6 days at the Suez Canal.

4.3.3 Time Taken, Speed and Distance

Route Length Lead Time

(nautical miles) (days)

Suez Canal 10,200 8-10 days

(Northern Asia – Northern Europe)

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Table 4: Length and Lead Time of Suez Canal

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 The time taken using the Suez Canal from Northern Asia to Northern
Europe is about 8 to 10 days which length is 10,200 nautical miles. The speed
for the cargo container vessels is 24 knots.

4.3.4 Volume Capacity

The cargo volume capacity for a vessel to pass through the Suez Canal
can be large vessels, medium vessels and small vessels. For the largest vessels
can has a capacity of 21,400 TEU, the medium vessels can has a capacity of
15,000 TEU and the smaller vessels can has a capacity of 4,100 TEU. The
cargo volume capacity depends on the size of the vessels itself. The recorded
carrying capacity is at 134,400 tons with capacity supply is 124,800 TEU
within a year and the number kept increasing year on year. The cost for the
container vessel is $1,400 until $1,800 per TEU. There is also an additional
cost which is the toll cost that needs to be paid according to the size and type
of the cargo vessels.

4.3.5 Weather and Environment

The Suez Canal has no problem with the weather as it is located far
from the Arctic Ocean. The Suez Canal has a polluting sector that is expanding
at a rate that is outpacing the boundaries of a livable earth. It has resulted in
an increase in plastic garbage dumping, oil spills, and the global spread of
exotic species, resulting in the demise of native vegetation and marine
creatures. (Rose, 2021)

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5.0 DISCUSSION
Transportation modes is vital in order to move container shipments from one place
to another especially to the continent that receive massive demand of the fastest and most
efficient modes of transportation. In conjunction for NOHAX company to find the most
efficient route for trading activities between Northern Asia and Northern Europe, it must
done some research on the efficiency factors in terms of facilities, economic environment,
time taken, speed, distance of the route, volume capacity of the cargo and cost incurred as
well as the weather influence and environmental concern that should be study to ensure
that they can fulfill customer demand and maximize their cost efficiency. As the water and
land road is different in terms of geographical environment, thus there will be a wide
difference of the efficiency factors mentioned earlier. To find the best route either using
Trans-Siberian railway, The Northern Sea Route or through The Royal Road of Suez Canal,
NOHAX Company must first understand about the region or country that will be covered by
the Northern Asia and Northern Europe. As for the Northern Asia, it is also referring to the
Central Asia which the country that included in this continent are Russia, Kazakhstan,
Uzbekistan, Turkmenistan, Kyrgyzstan, Tajikistan and Afghanistan while the North East Asia
consist of Mongolia, China, North Korea, South Korea, Japan, and Taiwan (Miacademy
Learning Channel, 2019) are always mentioned in most research paper as these countries
always had a wide trading connection with the Europe countries. On the other hand, the
Northern Europe consist of Finland, Sweden, Norway, Denmark, United Kingdom, Estonia,
Latvia, Lithuania and Iceland. (Miacademy Learning Channel, 2020) For Russia, the history
shown that Russia is both Europe and Asia which then called as Eurasia. Now let’s get
deeper into the all the efficiency of the routes by comparison.

5.1 Facilities
Eurasia had the wide opportunity to develop as a single market as well as
the growth oppurtunities for the European because of the integrated emerging
trade between the Northern Asian. Therefore, the Asian Landbridge that include the
Trans-Siberian Railway (TSR) go through development for decades. As for the
facilities such as railway gauge, sizes of the gauge is different according to which

23
country the railway are connecting to. According to table 1, it is shown that the
railway gauge for the country such as China and the Western Europe is 1435 mm
while Russia, Mongolia, Finland and other Central Asia countries adopt the same
railway gauge size at 1520 mm and Finland sometimes used size at 1524 mm. This
shown that China used the standard gauge size while the Central Asia countries and
Finland used the broad gauge. As TSR is always used to transshipment goods such as
container, therefore sizes of gauge is important like the broader gauge which is
reliable to handle the heavier and faster traffic. The factor that will be influence the
sizes of gauge are the traffic condition, development of poor areas, cost of track that
depends on the gauge width, speed of movement that depends on the wheel’s
diameter, and the nature of country which referring to the geographical terrain.
(Rail System, n.d.) Two gauge changes will be required to move cargo from China to
Germany, which the first one is the switch of China’s standard gauge to Russian
broad gauge and the second one is by switching the Russian broad gauge to
European standard gauge. (The Geography of Transport Systems, 2020)

In terms of documentation requirement, the Eurasian Northern corridor

require consignment note as the most vital document for rail transport. The
countries that include in the Eurasian Northern Corridor are the contracting parties
to the Organization for Co-operation between Railways (OSJD) which means the
consignment notes that known as Agreement on International Goods Transport by
Rail (SMGS) can be use throughout the corridor as well as shipment to Europe.
Other than that, the required documents are the packing lists, commercial invoices,
quarantine inspection requirement, certificates of origin, export or imports permit
and so on. However, sometimes the lack of harmonization of the document can
caused delay of the cargo or detentions at the borders. (UNESCAP, 2019) Through
Finland, there is bonded warehouses installed near Finnish-Russian border that is
user-friendly and easy to use. This Finnish bonded warehouses stored cargo
temporarily for shipper that are using TSR European transit route as well as the
Deep Sea route. Usually the types of cargo that using this bonded warehouses is the
household electrical goods that is exported from the North East Asia countries. By

24
using this types of facility, it can lower customs duty that being charge on the goods
entering Russia as well as lower charge on the transit railway compared to bilateral
cargo. (Tsuji, 2004)

By doing some research on the Northern Sea Route facilities, it can be said
that this route is complicated and used by comparatively small number of ships.
After the collapse of the former Soviet Union, this route’s infrastructure especially
at the Russia’s northern ports is in poor condition. But there are several facilities
and infrastructure to be mentioned such as the ice-breakers ship that is designated
to break even thickest ice along the way to ensure the ship can move forward,
seaports are believe to still operated below full capacity due to the deteriorating of
the equipment to do loading and unloading, ice-information and ice-forecasting
such as the historic ice-data, long-term ice-forecasts and short-term ice-forecasts,
communication and navigational aids such as the satellite communication, coastal
navigation aids, and satellite navigation, and there are also accident preparedness
that which involve search and rescue operation and also provide ship repair
facilities. (Ragner, n.d.)

Through the Suez Canal or The Royal Road, the current facilities and
infrastructure that are being developed and available along this route is the
expansion of the route width which then enable two-way route (of ship’s convoys)
for vessels which the one is from the southbound of the canal and the other is
northbound of the canal. This expansion has help to increase the number of cargo
vessels. This canal unlike the Panama Canal which it has no locks and making it
easier for ships to slip right through and expanded. In navigating through the Suez
Canal, it is a careful dense due to some parts of the channel only have a single
shipping lane with no room to pass. This is the reason why ships requires to line up
and go through in convoys early in morning. The southbound groups will begin their
journey from 3AM to 8AM at the Port Said by following the western channel while
at the same time, the northbound convoys will enter the canal. Everything will
carefully timed to make sure the two convoys can pass each other in the Great
Bitter Lake and the dual lane section of the canal without any stopping or

25
interruptions. (Practical Engineering, 2021) This convoy system had also greatly
reduced transit times. Despite, the current expansion that are being developed time
to time on the original route of Suez Canal, there are another expansion project
called New Suez Canal that runs into parallel direction to the original one to
accommodate the maximum number of ships that are expected to doubled from 50
to 97 daily. (Makoi, 2020) In addition, the Egypt government had also increased the
maritime component.

5.2 Economic
From the economic perspective of the TSR, the study of subsidies and tariff
that had been given and regulates to the shipping companies taken into account to
measure the economic environment of this route. This subsidies programe had
increase the interest of traders and shipping companies to use this routes to
maximize the competitive advantages. Despite subsidies, the Russian government
also offer the lower tariff on this types of Eurasian Landbridge which then will
reduce the attraction of shipping companies rather than used the air and water
transport.

In the Northern Sea Route, since 1978 the infrastructure and facilities on this
route is being developed. It is due to the Arctic geographical area that is surrounded
by iceberg. In order to make it successful , the Russian government had intervene in
the development as to make this route efficient in terms of the waterway operation
such as integrate this route as an international transport corridor. Indeed the
Russian government also had imposed laws and regulations for the ice—class
vessels to ensure that it is certified for the ice-resistance purposes which will be
followed by a nuclear power ice breaker ships and the Russian Marine Register will
play an important role before allow vessels to used the route. Due to the Suez Canal
blockage, the Russia’s representative of the Arctic Council known as Nikolai
Korchunov expresses that the incident had reinforces the need to develop the NSR
as a viable alternative to minimize the global trade and transportation risk.
(Mahanology, 2021)

26
 For Suez Canal, the blockage incident that occurred during the midst of
covid-19 pandemic on 23rd March 2021 had caused a major impact to the
international trade as the route also known as one of the busiest and important
trade route in the world due to global shortcut performance. (Practical Engineering,
2021) This incident had leave dozens of vessel stuck because waiting for the route to
be cleared by rescuer with about 30 ships had been blocked at the northbound and
three ships at the southbound. As a results, it caused a huge loss approximately $9.6
billion during the six day of blockage and the responsible party of the ship had to
pay $900 million for the compensation that had ruled by the Egyptian court.
(DeutscheWelle, n.d.) This economic problem can be seen as the weaknesses of the
Suez Canal which then forced shipping companies to shift and seek for alternative
route.

5.3 Time taken, Speed, and Distance

By comparing between the three routes, using The Trans-Siberian Railway
(TSR) will require lead time taken around 18 to 20 days with the distance by length
of the railway is around 13,659 km or 5,375 nautical miles and the average speed is
54 knots. While through Nothern Sea Route (NSR), the lead time is the same as TSR
but the distance is longer than TSR shorter than Suez Canal at 14,260.4 km or 7,700
nautical miles. The speed of vessel that sail along this route can reach from 17 to 24
knots. As for the Suez Canal, the length that ships has to travel using this route from
Northern Asia to Northern Europe is around 18,890.4 km or 10,200 nautical miles
which is longer than TSR and NSR with the lead time around 28 to 30 days indicate it
is longer than TSR and NSR lead time. The average speed of the vessels that going
through this canal is at 24 knot which lower than TSR to keep the traffic at steady
pace to prevent the Suez Canal’s natural banks from eroding.

By comparing between the three routes, TSR and NSR have the same lead
time which is 18 to 20 days while Royal road will take the longest time within 28 to
30 days. Through distance, Tsr have the shortest distance at 5,375 nautical miles
followed by NSR at 7,700 nautical miles and Royal route is longest at 10,200 nautical
miles. In terms of speed, TSR have the fastest average speed at 54 knots, followed

27
by Suez Canal at 24 knots and the longest speed will adopt by NSR at 17 to 24 knots
due to iceberg structure.

5.4 Volume Capacity and Cost

Through the analysis made, using the TSR the volume capacity of the each
block of train can support is around 80 until 100 TEU of container goods which
carrying capacity that can be reach is 1,540 tons and within a year through Northern
Asia to Northern Europe, it can reach capacity supply at 1,980 TEU. (Verny &
Grigentin, Container shipping on the Northern Sea Route, 2009) While using the
Northern Sea Route (NSR), it had recorded the average cargo volume at 23 million
tons as of 2019 (The B1M, 2022). As of 2009, the carrying capacity is around 39,000
tons with the capacity supply at 72,000 TEU within a year. By using the Suez Canal,
as of 2020 according to the Suez Canal authority, approximately 19,000 ships had
carried net tonnage more than 1.17 billion tons of cargo across the canal (Military
TV, 2021). In 2019, the carrying capacity is around 134,400 tons with capacity supply
within a year is 124,800 TEU. In terms of cost, using the TSR will be cost around
$1,800 up to $2,200 per TEU while travel through the NSR will incurred multiple fees
and taxes that can cost around $4.36 to $23.82 per ton and $2,500 to $2,800 per
TEU that will depend on the hull’s type and the season of NSR passage (Verny &
Grigentin, Container shipping on the Northern Sea Route, 2009) and through the
Suez Canal, the ship transit cost will be calculated by the Suez Canal toll calculator
based on the ship’s tonnage which can be estimated up to $230,000 (Makoi, 2020)
but the total cost for one TEU can be around $1,400 until $1,800.

Through the analysis made, Suez Canal have the biggest average carrying
capacity and capacity supply within a year at at 134,400 tonnes and 124,800 TEU
respectively, followed by NSR with carrying capacity and capacity supply is around
39,000 tonnes and 72,000 TEU respectively, and TSR has the smallest carrying
capacity and capacity supply at 1,540 tonnes and Suez . While through cost Suez
Canal offer the cheapest cost per TEU around $1,400 until $1,800 compared to TSR
and NSR.

28
5.5 Weather and Environment
According to the difference climate change each of the route, the TSR
involve different types of weather as it across many regions which makes certain
types of cargo is not suitable to travel using the route due to the goods of the cargo
that is sensitive temperature while for NSR geographical area is cold because
surrounded by iceberg. Suez Canal is located at the Egyptian area which the climate
change involve two seasons which are mild winter and and the hot and dry summer.
Ship must be aware of the strong wind because the incident of the the Suez Canal
blockage by the Ever Given ship speculated as caused by the strong wind. As for the
environmental conscious, Russian government is really committed to the
environmental protection which then tightening the rules of the shipping companies
that transport their cargo using the TSR while in the NSR the temperature gap
reduction is a serious matter as the hydrocarbon from the ships can caused global
warming as well as melt the ice of the Arctic Ocean and to protect the sea
ecosystems, pipeline had been installed on the ground. For instance, the ecological
tragedies at the high North that is resulted by the melting of the permafrost that
similar to the Norilsk disaster that cause by oil spilled (Mahanology, 2021). For Suez
Canal, the pollution occurred is due to oil spills, garbage dumping especially the
plastics and the exploration of exotic species.

According to the difference climate change each of the route, TSR and Suez
Canal have more advantage to carry various types of goods unlike NSR that travel
through the cold area the whole time which not suitable of certain goods, and in
terms of the environmental conscious, among the three routes, the using TSR is less
likely to cause major pollution rather than NSR and Suez Canal.

5.6 Most efficient route

In discovering the best route from the continent of Northern Asia to
Northern Europe, several factors had been analyze and taken into account. By
comparing the facilities and infrastructure, the TSR and Suez Canal shown a really

29
 high competitive advantage, while in terms of economic stability, the Suez Canal
held a more reliable economic competitiveness than TSR and NSR even though had
caused big loss with the issues of blockage because it is a one time incident. From
the perspective of the distance, the TSR recorded the shortest distance which then
followed by NSR and Suez Canal be the longest route. Through the time taken, the
TSR and NSR will take the shortest time to reach the destination and Suez Canal
recorded the longest time. Through the volume capacity per year, the Suez Canal
had the biggest carrying capacity and capacity supply with 134,400 tons and
124,800 TEU respectively as of 2009 and for the cost through comparison, the NSR
will require more expensive charges rather than Suez Canal due to equipments that
ships had to use to going through the Arctic Ocean. As for the weather and
environmental conscious the TSR is less likely to cause a major pollution compared
to NSR and the Suez Canal. Thus, it can be concluded that among those factors, the
Suez Canal is the most efficient routes to be used by NOHAX company for the time
being.

6.0 CONCLUSION

In conclusion, sea transportation is very important, particularly for multinational

businesses. Even the supply chain managers are looking at their supply chain operations
to ensure that everything is running well. The container shipping logistics chain is
important to carriers, shippers, vendors, wholesalers and others in the supply chain. This
is because the rail, highway and port processes impact their revenues and expenses. In
addition, sea transport also looks to be more cost-effective and ecologically friendly. This
is also one of the many examples of how crucial maritime transportation is to a variety of
sectors in the world. of course, global risks such as the global economic balance and its
changes, geopolitical risks leading to the devaluation of WTO norms and the politicization
of economic relations between the world’s leading economies and the impact of factors
such as the COVID-19 pandemic on the orientation and the structure of the freight flows
remain. In this paper, we concentrate on three routes of sea transportation only which are
Suez Canal, the Northern Sea Route and lastly the Transsiberian Railway. Before deciding

30
on the best route for NOHAX to transport the container shipment to the specified
locations, we conducted extensive study into the efficiency of all those three
transportation options. The factors that include are facilities, economics, time taken,
speed and distance, volume capacity and cost and lastly, weather and environment. As a
result, except for the cost and the time taken, we have decided that the Transsiberian
Railway is the most efficient route among those factors that have been discussed in this
paper.

7.0 RECOMMENDATION

In order for the researchers to have a clearer picture and can write a research
paper very well, there are some recommendations for it. First and foremost, for future
research, it is recommended that the researchers do the idealization before starting
writing the research study. During the idealization phase, all the members in the group
have to give their opinion and their own ideas. After that, the researchers can do further
discussion to decide on what resource that they would use as the main reference
throughout the research paper.

Next, for future research, it is advisable for the researchers to widen the resource
of data for future research study. Not to deny, there are a lot of articles and journals that
the researchers may find on the internet and use them. However, the researchers are
advised to find the resources from other publications too such as from the websites. This
is because the researchers might get far more resources. This way, it can help ease the
future researchers in the future research study as the researchers have widened
knowledge through these resources that the researchers found.

Since sea transport in recent years has become a complicated industry, it requires
the deployment of cutting-edge technology to ensure that its operations run smoothly. It
is recommended for the route especially Northern Sea Route to use VHF radio for the
ship-to- ship communication since this route is having difficulty with the limited
communication. It is called Digital Selective Calling (DCS) developed for digitally remote
control orders for transmitting and receiving distress alerts, urgent or safety calls and also

31
routine priority communications. As per the SOLAS (Safety of Life at Sea) convention, DSC
controllers can now be incorporated with VHF radios.

In general, ships travel along predetermined routes that are based on a variety of
input data. The ship operators can design an accurate path that takes the least amount of
time by examining ocean conditions, historical trends and other considerations. Because
of this it is advisable for ship operators to use the digital real-time route management.
Real-time route management has the potential to reduce travel time and increase
efficiency. Given the length of time that the ships are at sea and the chance that ocean
conditions in all the routes stated might change dramatically in a matter of hours, it is
important for ship operators to have access to this.

Because of the COVID-19 pandemic, it is not a good idea for the shippers to
transport documents in paper form. As a result, international and national policymakers
will be better able to assist the adoption of innovative technology. In this circumstance, it
is preferable to use e-documents. It can also eliminate a large number of paper
documents, resulting in yearly savings of billions of dollars. As technology becomes more
widely used, all parties’ adoption costs may decrease too.

Since late 2020, shipping costs have increased in part due to the shortage of
containers. Other countries remained under national lockdown and restrictions while Asia
countries slowly recovered. This has been preventing importing countries from returning
the cargoes. As a result of this problem, the number of containers should be increased.
According to our recommendation, the empty containers should be reloaded and
repositioned to the exporting countries back. It is not a good idea to leave the empty
containers behind. The empty containers should be returned to the system where they
are required the most. As a result, the shipping costs will be reduced because the shippers
would not be required to pay premium rates to retrieve their containers. The delay time
could have been reduced as well. This is because a delay might result in addition to the
fees.

32
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