Keeping cool

In 2010, Nordic Bulk Carriers was the first non-Russian company to traverse the Northern Sea Route (NSR) with its 43,000 DWT ice classed dry bulk carrier MV Nordic Barents. The journey from Norway to China via the Bering Strait was an historic moment for the Danish company because the NSR provides a shorter (by approximately onethird) distance from Europe to the Far East than the standard route through the Suez Canal. Many new opportunities for Nordic Bulk Carriers – and the wider shipping industry – were subsequently revealed.

Since that first journey, Nordic Bulk Carriers has continued to utilise its heavy ice-classed dry bulk carriers to sail the NSR in what it calls the NSR Project. In 2011, therefore, the company sent a much larger vessel through the Bering Strait: a 75,000 DWT ship carrying iron ore that left from Murmansk, Russia, to deliver to China. During 2012, following an agreement with the Russians and investment by American partners, Phoenix Bulkers, the company carried out a total of ten transits along the NSR. This makes it the route’s most active user.

Christian Bonfils, managing director, explains why the NSR is an important asset for Nordic Bulk Carriers: “We gained an extreme amount of publicity out of the journey but we didn’t do it for the publicity. We had only six employees in our company and we looked at the NSR as a business case for profit, and it really makes sense. The savings were big in 2010. Furthermore, one problem of ice trading is that there isn’t ice all year round. Our ships normally charter to clients in the Baltic, Canada, and other colder regions but when it reaches spring and summer we have to find new places. That’s why we looked toward the Arctic. It took us six months non-stop to make the first trip possible and it was very difficult because at the time there were no rules or regulations, but we succeeded. Not only does it save fuel but it provides us more consistent business year-round.”

Whilst the NSR is an important aspect of Nordic Bulk Carrier’s business, the company also has many other clients and charters both in and out of the ice trade. The fleet comprises 35 vessels in total, of which only four are ice-classed, and these are used to carry out conventional shipping charters across the world for primarily industrial clients. Nordic Bulk Carrier is a relatively small company with small cargo volumes but takes strength from this by utilising the flexibility a small size offers in order to deliver services with speed.

Despite ice-classed ships making up only a small percentage of the company’s total fleet, Nordic Bulk Carrier considers itself first and foremost an ice trading company. This is reflected in its participation in the ACCESS Project, a European Union-backed initiative to study the effects of climate change on Arctic waters in five different categories, or work packages (WP). Nordic Bulk Carriers is part of WP2, which focuses on marine transportation and tourism in the Arctic domain.

“We are part of a panel consisting of people such as climate experts, tourist industry specialists, and transportation companies tasked with the job of guiding potential new shipping routes,” Christian explains. “We are one of the few there that actually has practical use of the NSR. There are a lot of scientists and researchers on the panel but we provide a practical viewpoint. Our ships frequently sail those waters so we can contribute to the project real practical information.”

Business for Nordic Bulk Carriers during 2012 was very good, with volumes up 50 per cent compared to 2011. In the face of a depressed shipping market, the company has utilised its flexibility to deliver efficient services in a very specific niche, in which it has become a leader. The company’s ten transits along the NSR illustrate this perfectly.

Christian states, however, that the NSR has its own challenges but ice trading will nonetheless remain the core focus for Nordic Bulk Carriers well into the future: “The Arctic has big potential but I also think it is over-hyped. The NSR will never replace the Suez Canal, despite many in the industry thinking otherwise, because it only opens three to four months a year. For us, however, it is a perfect addition to our existing ice-classed vessel chartering business outside the Arctic.

“For the future our clear strategy is to focus on ice trading. We keep looking at new areas with the potential for development: Greenland, for example, is a possibility. We are also eyeing the cargo moving in and out of Arctic ports, and we might start to do some shipments in that market so are following such activity closely. We may not expect the same growth rate that we had in 2012 but we definitely expect some level of growth in Nordic Bulk Carriers over the coming five years.”

Nordic Bulk Carriers
Pioneered Northern Sea Route
Ice trading specialist
Small, flexible organisation