A binary probit model to analyze freight transportation decision-maker perspectives for container shipping on the Northern Sea Route

Abstract

The predicted decrease of ice presence in the Arctic Ocean may allow commercial container shipping to use the Northern Sea Route (NSR) throughout the year starting by 2050. This paper conducts a stated preference survey of freight transportation decision-makers in East Asia and Europe to understand their perspectives towards the use of the NSR to ship cargo. A binary probit model is used to investigate the correlation between the operational and behavioral characteristics of freight transportation decision-makers and their attitudes towards maritime freight carriers operating through the NSR. The survey results suggest that a significant percentage of users will not use the NSR, at least during the initial period of operations, if the NSR is considered for container transportation between East Asia and Europe. Some perceptible differences were observed between the responses of forwarding companies, and freight transportation decision-makers from other industries, with forwarding companies less likely to use the NSR if their current carriers offer it as an alternative. Freight transportation decision-makers with large volumes, having shipments from East Asian countries but not to them, and/or ship chemical commodities, were found to be less likely to use the NSR.

This is a preview of subscription content, access via your institution.

Figure 1

References

  1. Adamchak, F. and Adede, A. (2013) LNG as marine fuel. IGT International Liquefied Natural Gas Conference Proceedings 1: 321–328.

    Google Scholar 

  2. Alibaba Group Holding limited. (2016) Available at: www.alibaba.com. Accessed 20 May 2016.

  3. American Bureau of Shipping. Navigating the Northern Sea Route adviser. (2014) Available at: http://ww2.eagle.org/content/dam/eagle/publications/2014/NSR_Advisory.pdf. Accessed 20 May 2016.

  4. Beitler, J. (2015) May in decline. National Snow and Ice Data Centre, June 2015. Available at: http://nsidc.org/arcticseaicenews/category/analysis/. Accessed 1 Dec 2015.

  5. Chao, S.-L. and Chen, B.-C. (2015) Effects of switching costs on customer loyalty in the shipping industry. Maritime Economics and Logistics 17(3): 341–358.

    Article  Google Scholar 

  6. China import and export fair. (2016) Available at: http://www.cantonfair.org.cn/en/. Accessed 20 May 2016.

  7. EY’s Global Oil & Gas Centre. Arctic Oil and Gas. (2016) Ernst & Young Global Limited. Available at: http://www.ey.com/Publication/vwLUAssets/ey_global_oil_and_gas_capabilities/$FILE/global_oil_and_gas_capabilities.pdf. Accessed 20 May 2016.

  8. Hampert, M. (2013) The future of arctic shipping: a new silk road for China? The Arctic Institute, Centre for Circumpolar Security Studies. Available at: http://www.thearcticinstitute.org/2013/11/the-future-of-arctic-shipping-new-silk.html. Accessed 20 May 2016.

  9. Ho, J. (2010) The implications of arctic sea ice decline on shipping. Marine Policy 34(3): 713–715.

    Article  Google Scholar 

  10. Guo, Y. and Peeta, S. (2015) Rail-truck multimodal freight collaboration: Truck freight carrier perspectives in the United States. Journal of Transportation Engineering 141(11): 1-11.

    Article  Google Scholar 

  11. Guo, Y., Peeta, S., and Mannering, F.L. (2016) Rail-truck multimodal freight collaboration: a statistical analysis of freight-shipper perspectives. Transportation Planning and Technology 39(5): 484–506.

    Article  Google Scholar 

  12. International Exhibition for Transport and Logistic Services and Technologies: TRANSRUSSIA. (2015) Available at: http://www.transrussia.ru/en-GB. Accessed 20 May 2016.

  13. Khon, V.C., Mokhov, I.I., Latif, M., Semenov, V.A., and Park, W. (2010) Perspectives of northern sea route and northwest passage in the twenty-first century. Climatic Change 100(3/4): 757–769.

    Article  Google Scholar 

  14. Kuptsov, N. (2014) Northern sea route: Perspectives for bulk carriers and liquid tankers. Applied Mechanics and Materials 587–589: 1986–1992.

    Article  Google Scholar 

  15. Lasserre, F. and Pelletier, S. (2011) Polar super seaways? Maritime transport in the arctic: An analysis of shipowners’ intentions. Journal of Transportation Geography 19(6): 1465–1473.

    Article  Google Scholar 

  16. Lee, C.-Y. and Meng, Q. (2015) Handbook of Ocean Container Transportation Logistics. London: Springer

    Book  Google Scholar 

  17. Liu, M. and Kronbak, J. (2010) The Potential economic viability of using the northern sea route (NSR) as an alternative route between Asia and Europe. Journal of Transport Geography 18(3): 434–445.

    Article  Google Scholar 

  18. Marsh & McLennan Companies. Arctic Shipping: Navigating the Risk and Opportunities. (2014) Available at: https://www.marsh.com/us/insights/arctic-shipping-navigating-risks-opportunities.html. Accessed 20 May 2016.

  19. Northern Sea Route Administration. (2016) Northern Sea Route Information Office. Available at: http://www.arctic-lio.com/nsr_transits. Accessed 20 May 2016.

  20. Panayides, P.M. (2006) Maritime logistics and global supply chains: Towards a research agenda. Maritime Economics and Logistics 8: 3–18.

    Article  Google Scholar 

  21. Prodexpo 2014: 21st International Exhibition for Food, Beverages and Food Raw Materials. (2014) Available at: http://www.prod-expo.ru/en/. Accessed 20 May 2016.

  22. Ragner, C.L. (2000) Northern sea route cargo flows and infrastructure—present state and future potential. Fridtjof Nansen Institute Report. Available at: http://www.fni.no/pdf/FNI-R1300.pdf. Accessed 20 May 2016.

  23. Somanathan, S., Flynn, P., Szymanski, J. (2009) The northwest passage: a simulation. Transportation Research Part A: Policy and Practice 43(2): 127–136.

    Google Scholar 

  24. The NSR Survey in English and Chinese Languages. (2015) Available at: https://purdue.qualtrics.com/SE/?SID=SV_e9ihQ2tB2CUehDL. Accessed 20 May 2016.

  25. The NSR Survey in English and Russian Languages. (2015) Available at: https://purdue.qualtrics.com/SE/?SID=SV_1X1KfKDA34q9mlL. Accessed 20 May 2016.

  26. Verny, J. and Grigentin, C. (2009) Container shipping on the northern sea route. International Journal of Production Economics 122(1): 107–117.

    Article  Google Scholar 

  27. Washington, S.P., Karlaftis, M.G., and Mannering, F.L. (2011) Statistical and Econometric Methods for Transportation Data Analysis, 2nd edn. Boca Raton: Chapman & Hall/CRC.

    Google Scholar 

Download references

Acknowledgments

This study is based on research supported by the NEXTRANS Center, the USDOT Region 5 University Transportation Center at Purdue University. The authors gratefully thank the participation of various freight transportation decision-makers in the study survey. The authors would like to thank Dr. Helen Graas and Dr. Wei Sun for their help with identifying necessary permissions for conducting the survey, and Yuntao Guo for his valuable comments. Any errors or omissions remain the sole responsibility of the authors.

Author information

Affiliations

Authors

Corresponding author

Correspondence to Srinivas Peeta.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Benedyk, I.V., Peeta, S. A binary probit model to analyze freight transportation decision-maker perspectives for container shipping on the Northern Sea Route. Marit Econ Logist 20, 358–374 (2018). https://doi.org/10.1057/s41278-016-0046-4

Download citation

Keywords

  • Northern Sea Route
  • binary probit model
  • container transportation
  • stated preference survey
  • freight transportation demand
  • maritime transportation