Comparative cost-effectiveness analysis of Arctic and international shipping routes: A Fuzzy Analytic Hierarchy Process

Abstract

The cost-effectiveness of six Arctic route alternatives, including the Arctic routes likely to be opened in far future due to ice melting faster than expected stemming from the global warming, and current Suez and Panama Canal routes are analyzed for shipping between Asian and European ports. Eleven different size, fully loaded real container ships' single transit voyage from Shanghai to Rotterdam on eight alternative routes at different sea conditions, without interim port calls enroute are studied. A basic cost, revenue and profit empirical calculation model is applied first with near-term data to provide input for FAHP. Then, to evaluate cost-effectiveness and profitability of the routes under a multi-criteria decision environment, Fuzzy Analytic Hierarchy Process (FAHP) is applied as a tool to obtain refined results. For the predictions of transportation sector and shipbuilding industries, it is shown that the Central Arctic Ocean and Northwest Passage routes may become cost-effective for transit voyages between Asia and Europe ports in a few decades.