BANGOR, Maine — Maine is in a position to capitalize on emerging shipping lanes in the Arctic Sea in a major way, which could see the state become a hub of international trade in the Northeast.
This was the general consensus among military, business and education officials gathered at the Leadership in the High North symposium in Bangor.
The Maine National Guard, in conjunction with the University of Maine and international and regional partners, hosted the two-day symposium at the Maine National Guard Regional Training Center in Bangor. Although international trade opportunities were a major focal point, the issue of international conflict was also very much present in the conversation.
“Geopolitical conflicts are certain to arise as countries debate over whether a route is a port of national interest or an international trade route,” said John Henshaw, executive director of the Maine Port Authority.
“This is a high-priority issue for Maine and the country,” said Sen. Angus King in a video message to the audience.
“All of us learned about explorers looking for the Northwest Passage that [explorers] could never find. Now we’ve found it,” King said. “This will be a part of global trade in the future … it requires a level of international cooperation.”
The Northwest Passage is one of four major shipping lanes that are becoming more and more accessible due to the recession of the polar ice sheet in recent years. With the addition of these new shipping lanes comes international controversy as countries that border the Arctic struggle to stake a claim on the various lanes.
The Northwest Passage, which traverses northern Canada, has been the subject of international controversy. The U.S., along with Europe and Asia, feel that the route, which was traversed by a commercial shipping vessel for the first time last year, should be counted as international waters, whereas Canada believes the route to be within their national boundaries.
The Northeast Passage, also known as the Northern Sea Route, passes along the northern coast of Russia and was first traveled by Chinese shipping firm COSCO in 2013. This route cuts the journey time from China to Europe by 12 days, resulting in both massive time and fuel savings. However, according to Eimskip Steamship Company’s U.S. general manager Laus Isfeld, the Russian military has been very present in the trade route and requires shipping vessels to pay a $400,000 toll fee for icebreaker escorts, greatly reducing the potential savings afforded by the shorter route.
Currently, these lanes are only open for a four-month period during the summer. According to Henshaw, it is estimated that these lanes will be regularly accessible within the next 10 years and that the ice will have dissipated enough to open the Transpolar route, which passes from the Atlantic Ocean to the Pacific by going directly across the Arctic Ocean and is only 2,100 miles long. This, along with the other two routes as well as the Arctic Bridge, which passes from Canada to Northern Europe, would significantly decrease shipping distances.
“If I was an American investor, the first question I would ask is … where is the military if something happens? China knows [where theirs is], Russia knows,” Isfeld said.
Based in Iceland, Eimskip relocated its North American headquarters from Norfolk, Virginia, to Portland in March 2013 with the intention of making Maine their gateway to the U.S. market.
“Maine has been developing over the last four years and so I look to work with [cities] who are on the way up rather than those who are on the way down,” Isfeld said.
Henshaw is enthusiastic about the partnership between Eimskip and Portland.
“It gives us cost-effective and time-sensitive access to markets where we previously didn’t have access,” Henshaw said. “To [Eimskip], Maine is a gateway to the American market, and so they’re looking to leverage that relationship so they can access U.S. markets. [Maine] needs to be looking at it the same way.”
Henshaw believes that by utilizing the increase in international traffic, Maine will be able to more easily and effectively export goods to Asia and Europe as well as direct goods from other states, becoming a trade hub.
Patrick Arnold is the president of SoliDG Corporation and mirrors Henshaw’s sentiments. He believes that these new shipping lanes will make long-distance shipping much more cost-efficient.
“It’s no longer a function of geography. It’s a matter of … competition in trade lanes,” Arnold said. “[With a $2,000 shipping fee] you can go from Maine to Virginia or Delaware, but you can also get to the United Kingdom [for the same amount]. You can get to Norway [for the same amount].
“Maine is a net exporter. We’ve had some great export opportunities that we need to do more with,” Arnold said.