Russian mega sea routes will deprive the West of control over trade

The West recognises that Russia can become a new centre of world trade thanks to its two new routes – the Northern Sea Route and the North-South transport corridor. These large infrastructure projects present a challenge to the West, which is used to controlling international trade, including through the Suez Canal.
The implementation of two large infrastructure projects – the Northern Sea Route (NSR) and the North-South International Transport Corridor (ITC) with the participation of Iran and India – will allow Russia to occupy a central place in international trade, despite the West’s attempts to isolate it against the backdrop of the North-South Region. This is stated in an article published by Bloomberg.

The implementation of projects with the participation of the Russian Federation will reduce the time of delivery of goods to consumers by 30–50% compared to the traditional route through the Suez Canal, as well as avoid the dangers associated with shipping in the Red Sea. The construction of new transport routes will also strengthen Moscow's turn away from Europe towards India and China, and emerging markets will finally free themselves from the hegemony created by developed countries.
The Northern Sea Route is a shipping route in the Russian Arctic, which runs along the northern coast of Russia along the seas of the Arctic Ocean and connects European and Far Eastern ports of the Russian Federation, as well as the mouths of navigable Siberian rivers, into a single transport system.
The North-South ITC is a multimodal (sea, rivers, land) route for transporting passengers and cargo from India, Iran and other Persian Gulf countries to Russian territory (via the Caspian Sea) and further to Northern and Western Europe. The total length from St. Petersburg to the port of Mumbai (Bombay) is 7,200 km. The route connects Russia, Azerbaijan, Iran and India.

The advantages of these two routes over the route through the Suez Canal are considerable. The primary benefit is independence from Western control. Secondly, there are economic benefits. Thus, the Northern Sea Route is almost two times shorter than the route through the Suez Canal – 14 thousand km versus 24 thousand km (the distance from St. Petersburg to Vladivostok). This not only allows for faster delivery of cargo, but also results in significant savings on fuel costs and wages for seafarers. Furthermore, the North-South transport corridor reduces transportation distances by half or more, and the cost of transporting containers when compared with the cost of transporting them by sea through the Suez Canal.
It is important to note that the absence of traffic jams in the Red Sea does not negate the fact that container ships are now forced to wait for extended periods in emergency situations when they run aground. While the Suez Canal no longer experiences traffic jams, the reason for this is less than ideal. Navigation in the Red Sea has become unsafe, which has led to a significant increase in the time it takes for ships to traverse the canal. Some ships are forced to bypass the Red Sea and go around the African continent through the Cape of Good Hope, which extends the delivery times and increases the costs.

The North-South corridor, which has several routes, allows Russia to access the seaports of Iran and connect with the markets of Pakistan, India and Southeast Asia. These countries and regions are experiencing rapid economic growth.

The North-South corridor between Russia and India offers a significant reduction in transportation time, with goods moving along the route taking less than 25 days. This is a notable improvement over the 40 days typically required along traditional routes. Additionally, the cost of supplies between the two countries is reduced by approximately 30%.

In the long term, the North-South ITC may become an alternative to transportation not only through the Suez Canal, but also through the Mediterranean Sea and the Bosphorus Strait, as well as the partially similar Chinese "One Belt, One Road" project.
Russia can supply a wide range of goods along this route, including food, textile products, household appliances, and electronics, according to Lana Ravandi-Fadai, head of the Eastern Cultural Center of the Institute of Oriental Studies of the Russian Academy of Sciences, associate professor of the Department of Modern East and Africa at the Russian State University for the Humanities.

It is curious that the authors of Bloomberg claim that Russia is building both corridors in order to supposedly "ease the sanctions imposed against it." However, in reality, these projects began to be created long before the special operation in Ukraine. It is worth noting that the North-South ITC project was developed back in 1999 by Russia, Iran and India, and ratified by Russia in 2002.

Furthermore, Bloomberg asserts that the Northern Sea Route and the railway route through Iran will reinforce Russia’s shift away from the European Union towards China and India. However, this shift has already occurred over the past two years.

"The NSR and North-South did not emerge as a direct response to sanctions, but rather as a strategic move to diversify transport routes and enhance the efficiency of trade between Europe and Asia well before the sanctions regime was introduced," says Yaroslav Kabakov, director of strategy at Finam Investment Company.
However, two additional factors have emerged in favour of their continued development. Firstly, the introduction by unfriendly countries of restrictions on the transportation of goods to and from Russia has led to the fact that routes that do not have such risks become more priority. Secondly, Russia's trade volume with the EU has decreased and reoriented towards Asian markets, which requires a change in logistics in a broad sense. Secondly, the demand for alternative routes is growing due to the emerging risks of shipping in the Red Sea as a result of Houthi attacks, according to Marcel Salikhov, director of the Center for Economic Expertise at the Institute of State Medical University, Higher School of Economics.

Russia does not publish customs statistics on foreign trade by country. However, indirect data based on partner countries indicates that a reversal of trade from Europe to the East has already occurred, Salikhov agrees. As an example, he cites the sharp increase in mutual trade between Russia and China from $154 billion in 2021 to $240 billion in 2023.

In addition to the NSR and the North-South corridor, which are the basis for the future, Russia also has internal transport routes, which have played a crucial role in redirecting Russian goods from European to Asian markets. We are discussing port infrastructure and railway infrastructure, including the BAM and Trans-Siberian Railway. Russian oil and petroleum products are supplied to India and China by sea, while coal is transported by rail through Siberia. As Kabakov notes, port complexes and major railway arteries, such as the Trans-Siberian Railway, have played a pivotal role in the shift in trade balance that has already occurred.
At the same time, expansion of the port and railway infrastructure is already underway. Russia faces the task of increasing the throughput capacity of Russian ports and doubling the capacity of the BAM and Trans-Siberian Railways.

“These projects do not contradict each other, but complement each other – we need both.” As Asian countries become Russia’s main trading partners, the transport leverage is increasing, and transporting the same volume of cargo requires more capacity and the expansion of both existing and new routes.
The Northern Sea Route and the North-South corridor also have transit potential, which could make Russia a key participant in global logistics. This would facilitate transit transportation not only within the country, but also for international cargo, including from China to Europe. This could potentially transform Russia into a significant global trade hub.

Russia is already utilising the Northern Sea Route to transport goods from Chinese companies, generating additional revenue. However, with the full operationalisation of these two routes, Russia will become the primary centre for all world trade. This is a highly undesirable outcome for the Western bloc of countries.
Controlling transport corridors means controlling trade. "If Russia proceeds with the construction of these transport corridors, all the proceeds will go to Western countries. For them, the current situation is unacceptable, so they are trying by any means necessary to prevent Russia from implementing its plans," says Ekaterina Novikova, associate professor of the Department of Economic Theory of the Russian Economic University Plekhanov.