Climate change risk could turn into an opportunity for the shipping industry as melting Arctic ice opens up new routes. These northern alternatives would save transit time as well as toll and fuel costs compared to the Panama Canal and other routes, according to the Marsh report "Arctic Shipping: Navigating the Risks and Opportunities." What's more, discoveries of oil and gas in the region make northern routes much more attractive commercially and may drive expansion of shipping in northern waters.
Because of changing ice conditions, shipping vessels are required to be escorted through the Northern Sea route. Despite the challenges, 71 vessels successfully made the trip in 2013, compared to 45 in 2012. But the downsides are evident to hull insurers, which are looking at the unforeseen damage extreme temperatures can cause to engines, pumps and other equipment.
Further, salvage companies are wary of the long distances that would need to be traveled for service or repairs to damaged vessels, according to Marsh. Pollution is also of great concern, as oil reacts differently in extreme cold.