State of research in arctic maritime logistics

Ilin, Igior et al. Conference Paper State of research in arctic maritime logistics Provided in Cooperation with: Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management Suggested Citation: Ilin, Igior et al. (2020) : State of research in arctic maritime logistics, In: Jahn, Carlos Kersten, Wolfgang Ringle, Christian M. (Ed.): Data Science in Maritime and City Logistics: Data-driven Solutions for Logistics and Sustainability. Proceedings of the Hamburg International Conference of Logistics (HICL), Vol. 30, ISBN 978-3-7531-2347-9, epubli GmbH, Berlin, pp. 383-407, https://doi.org/10.15480/882.3145 This Version is available at: https://hdl.handle.net/10419/228956 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-sa/4.0/ Published in: Data science in maritime and city logistics Carlos Jahn, Wolfgang Kersten and Christian M. Ringle (Eds.) ISBN: 978-3-753123-47-9 , September 2020,epubli Proceedings of the Hamburg International Conference of Logistics (HICL) –30 CC-BY-SA4.0 Igor Ilin, Wolfgang Kersten, Carlos Jahn, Jürgen Weigell, Anastasia Levina, and Sofia Kalyazina State of Research in Arctic Maritime Logistics First received: 12. Mar 2020 Revised: 25. Jun 2020 Accepted: 31. Aug 2020 State of Research in Arctic Maritime Logistics Igor Ilin 1, Wolfgang Kersten 2, Carlos Jahn 3, Jürgen Weigell 3, Anastasia Levina 1, and Sofia Kalyazina 1 1 – Peter the Great Saint – Petersburg Polytechnic University 2 – Department of Business Logistics and General Management 3 – Hamburg University of Technology, Institute of Maritime Logistics Purpose: The Arctic is of interest for many states and commercial organizations as it has a large undiscovered potential but very challenging climate and logistical conditions. Arctic maritime logistics need significant investments in infrastructure and is supposed to cause a minimal impact on the environment during port operations and cargo transit by creating efficient and safe supply chains. At the same time, ensuring the most efficient, reliable and safe functioning of supply chains is required. Methodology: The methodological basis of the paper is the analysis and structuring of existing publications on Arctic maritime logistics, a systematic review and formulation an applied system of relevant performance indicators related to Arctic supply chains (e.g. ice conditions, vessels and their parameters, the safe operation of floating production facilities and properties of ports). Findings: The result of this paper is a systematic overview of the current state of research on Arctic maritime logistics challenges and the influencing key performance indicators as well as approaches to assess the performance at all stages of the Arctic supply chain to facility and improve Arctic supply chains in the future. Originality: The originality of the study is defined by the scope of the review conducted. It is the first comprehensive overview over Arctic supply chains covering all relevant countries from a maritime logistics standpoint. The results of this paper create a solid foundation for further research in the area of developments of Arctic maritime logistics. 384 Igor Ilin et al. 1 Introduction The exploration of the Arctic has become the object of close attention of governmental bodies, the scientific community, and individual researchers. Characteristics of the Arctic that determine the need for special approaches to its development are the “extreme climatic conditions, focal (cluster) nature of the territories development, […] remoteness from major industrial centers, high resource intensity” (Didenko, Skripnuk and Rudenko, 2015 cited in Yakovlev et al., 2019, p. 1), lack of labor force, outflow of the population, inaccessibility of regional facilities, dependence on the supply of resources from other regions, low sustainability of ecosystems, and the presence of waste and pollution from human activities. Globally, the Arctic is the region with the highest undiscovered hydrocarbon potential. The Arctic exploration of offshore hydrocarbon deposits (the socalled offshore zone) entails not only economic benefits from the production and sale of hydrocarbons, but also has significant social effects associated with job creation and increasing the region’s attractiveness for the inhabitants, as well as environmental effects associated with violation of the ecosystem of the region and the need for removal and disposal of waste from the activities of mining enterprises (Katysheva and Tsvetkova, 2017). The evolution of the Arctic shelf deposits within the sustainable development concept requires consideration of various economic, social, natural, environmental, and institutional factors, each of which determines certain limitations and sets decision criteria for the development and operation of individual deposits and the exploration and development of the shelf zone and the entire region as a whole. Thus, the sustainable development of the State of Research in Arctic Maritime Logistics 385 Arctic suggests an effective balance between economic growth, environmental protection, and social relations. Existing Arctic shelf development projects are often distinguished by a single-criterion decision making - economic growth to the detriment of other components (social and ecological ones) (Tsyganov, 2019; Infrastructure Development Plan for the Northern Sea Route until 2035). The transport and logistics infrastructure of the shelf zone and the region is one of the key factors for the economic, social and environmental efficiency of shelf field development since it determines the possibility of developing and operating the field, as well as the availability, terms of provision and cost of the resources necessary for the development and operation of fields (personnel, material and technical resources) and, as a result, profitability of hydrocarbon production. 386 Igor Ilin et al. 2 Methodology As a research methodology, qualitative methods were used in the form of an analysis of the results of materials published in scientific literature on the Arctic shelf zone development. Interpretative methods to analyze the results are used. The study used a systematic approach to conducting a literature review. It consisted of a wide-ranging review of the available scientific literature, its assessment, and the formation of the research result. In relation of the development of the Arctic region and the Russian fuel and energy sector, the authors conducted a study to develop an effective model for offshore field development in the Arctic zone of the Russian Federation (Balashova and Gromova, 2017). For the development of offshore fields the model of creating consortia was considered and analyzed, considering the specifies of the Arctic region (Balashova and Gromova, 2017). In this model, from two large companies onwards, companies are temporarily merged to carry out a specific project under agreed conditions. At the same time, the state provisionally selects potential candidates (Balashova and Gromova, 2017). The authors also conducted a study to develop proposals for the Artic region’s selection of work organization technology, considering social aspects (Kozlov et al., 2017). The advantages of long-distance commuting strategy (shift work) for the mining industry and for remote regions such as the Arctic, where skilled labor is not available, are revealed. At the same time, this technology also has drawbacks, and therefore further research is planned to select an effective technology for the Arctic (Kozlov et al., 2017). Also, this group conducted a study to develop a concept of enterprise architecture and a methodology to develop and implement an Integrated State of Research in Arctic Maritime Logistics 387 Management System (IMS) for mining companies (Ilin et al., 2017). It is recommended that the implementation of the IMS Project takes place in synchronization with the master plan of the project in corporate construction (Ilin et al., 2017). This allows to improve the development and integration of automated systems, build "a business model for an effective enterprise management system, and reduce future costs for the modernization of production and services". Further studies are supposed to build the most efficient architecture for the mining industry and the Arctic region (Zaychenko, Ilin and Lyovina, 2018; Ilin, Levina and Iliashenko, 2017). In addition, models for creating effective value chains in relation to the Arctic region were considered (Afonichkina, Afonichkin and Didenko, 2019). Also, the decisionmaking support methodology may be the methodological basis for planning the development of the Arctic region, which allows assessing future risks and compensating for them in advance. This methodology predicts economic and financial indicators and financial risks, evaluates various development options. The relationship between risk and return is also calculated (Bril et al., 2017). 388 Igor Ilin et al. 3 Results To collect and analyze information on the state of research in development of the Arctic shelf zone under the logistic approach, the relevant scientific literature in this area has been studied. Information on basic research studies are presented below. As part of the study of the problems of the Arctic, including areas of innovation and technological development, world scientific researchers include research universities and scientific organizations of the Arctic countries (Rachold, Hik and Barr, 2015). All countries conduct research on various problems relating to the Arctic, including universities and scientific organizations of Russia, studying, and implementing projects for the constituent entities of the Russian Federation included in the Arctic zone. The organizations listed below are the main global researchers on Arctic research: The United States Arctic Research Commission (USARC, 2020) focuses on a wide range of problems under the slogan "The USA is an Arctic power with borders and fundamental interests in the Arctic zone". The United States Artic Research Commission publishes a wide array of studies and reports regarding topics of interest in the Artic like oil exploration but also on social issues of the people living in the Artic (USARC, 2020). The University of the Arctic (UArctic, 2020) representing an international network of colleges, research institutes, universities, as well as organizations working in the field of higher education and research in the circumpolar North. The research results are published in the Arctic Yearbook, an international peer-reviewed publication that addresses current topics of “regional geopolitics, circumpolar relations, and security” (UArctic, 2014) in a State of Research in Arctic Maritime Logistics 389 broad sense. A review of research issues shows that they affect: strategic, political, and technological aspects; problems of increasing human resources potential in the Arctic; higher education and vocational training; workforce development; emergency preparedness and response; tourism; transport infrastructure; military / state security infrastructure; increased local participation in resource development and research; regional management capacity; migration regional innovation and human capital; healthcare and social security (UArctic, 2014). An approach has been developed that divides the Arctic space into target subspaces (Didenko, Skripnuk and Krasulina, 2016; Didenko, Skripnuk and Rudenko, 2015; Rudenko and Didenko, 2015). The Arctic zone of the Russian Federation is composed of the possible types of target subspaces, which will be named and partly be explained below (Didenko and Skripnuk, 2018; Didenko, Skripnuk and Krasulina, 2016; Didenko, Rudenko and Skipnuk 2015): • Base cities are medium-sized to large settlements and factories, on which area “industrial organizations, construction sites, railway terminals and other industrial infrastructure facilities, as well as commercial, domestic, medical, cultural, educational and administrative facilities” (Didenko and Skripnuk, 2018, p. 4) can be found. • Normally mobile shift camps are located close to mineral deposits or in areas where infrastructure facilities are built and maintained. Permanent infrastructure is difficult and economically disadvantageous (Didenko and Skripnuk, 2018). • Territories for the extraction of mineral resources (Didenko and Skripnuk, 2018). 396 Igor Ilin et al. the context of global relations. The study by Henderson and Loe (2016) considers the environmental risks in the Arctic region from hydrocarbon exploration and production, as well as issues of the necessary infrastructure and economic development indicators, including from the perspective of other energy sources. This article gives an overview of oil and gas development on the Arctic shelf and outlines the development potential of the region. The oil, gas and business opportunities of the Arctic region are considered in the article (Motomura, 2018). In particular, the analysis of this issue considers the complex and expensive operating conditions of fields, as well as the parameters of the worldwide hydrocarbon market. The development of Arctic maritime logistics should be considered comprehensively, considering the development of the Northern Sea Route, accelerating the socio-economic developing of the Arctic zone, and implementing investment projects for mining. To accomplish these tasks, it is important to create port and coastal infrastructure, to expand the Northern Sea Route’s icebreaker to reduce the risks of navigation along the Northern Sea Route, and combine the sea routes with freight traffic within the framework of the general transport infrastructure (Northern latitudinal passage) (Didenko and Cherenkov, 2018; Infrastructure Development Plan for the Northern Sea Route until 2035). It also requires a common set of measures for navigational and hydrographic support and navigation safety, and the creation of a unified global system of maritime communications along the northern sea route. An important task is to ensure year-round navigation (Gurlev, Yemelyanova and Klimashkina, 2019). State of Research in Arctic Maritime Logistics 397 4 Interpretation of the results The literature research showed that this topic is very relevant and there are a lot of different opinions in the scientific community. The literature research also showed that most research was done in Russia and Canada about Arctic supply chains and to a lesser degree in other countries. This paper also showed that the interest in this topic increased over the last years with changes in temperature in the Artic and thus new opportunities. Another key finding is that not only the approaches to the topic vary widely but also the findings. Based on the information obtained as a result of the analysis of existing thematic scientific literature, it is relevant to establish the foundations of sustainable development for the Arctic shelf development system and the DSS model, which allows to process and analyze heterogeneous data on the decision-making situation, as well as create potential scenarios for the development of the situation. Such DSS should consider all the above-mentioned groups of risks associated with the provision of Arctic maritime logistics. The implementation of such a fundamental task requires the involvement of researchers and practitioners with competencies in the fields of socioeconomic systems management, logistics, IT, expertise in the field of hydrocarbon production, transport and business modeling, design of information systems and applications, and the formation of requirements for IT services. To solve the problem of an effective sustainable development of shelf fields and the development of the corresponding regions of the Arctic zone in a multifactorial and multicriterial way, it is necessary to provide an 398 Igor Ilin et al. appropriate theoretical and methodological approach of such a development. A complete analysis of the decision-making situation for each individual project (field), a description of all possible scenarios for the development and operation of individual fields from a sustainable development perspective, as well as scenarios for the development of the shelf zone and the region as a whole are required. It is important to establish a theoretical and methodological foundation for the development of the Artic shelf. On this, a decision model support system is modelled. This allows processing and analyzing heterogeneous data about the decision-making situation and thus working out possible scenarios. It is also recommended to introduce a key performance indicator system that covers all parameters of the supply chain (ice conditions, vehicles used and their parameters, safe operation of floating production facilities, port characteristics, etc.). A constant analysis of the system of such indicators will be required to identify ways to improve the efficiency of supply chains and weaknesses. A promising way to develop Arctic marine logistics is to expand the Northern Sea Route. This should address the above unsolved problems associated with it and the existing risks. Accordingly, several proposals are required to effectively address the identified problems. State of Research in Arctic Maritime Logistics 399 5 Conclusion A significant complication of the development of marine logistics in the Arctic are problems in the Northern Sea Route with operations. In connection with this, further studies are needed that can offer ways to solve these problems. Especially with warmer temperatures in the Artic and thus less / thinner ice new routes will become economically feasible and be a competition for established routes, e.g. the Northern Sea Route could be an option for transports from East Asia to Northern Europe. This will lead to lower costs and also to less CO2 emissions in the shipping sector. Further studies are also planned to develop an optimal system of indicators of the efficiency of the functioning of supply chains. Thus, the focus of research on marine logistics in the Arctic is on the topics of integrated development of the region, calculation and accounting of risks, optimization of the population, optimal integration of the Arctic subspaces, use of digital technologies in the developing of the Northern Sea Route. Previous studies have shown significant problems that should be addressed. These problems are mainly associated with the climatic features of the region, the small number and uneven distribution of the population, settlements, ports, as well as with the identified risks. They also require solving the problems of the operation of the Northern Sea Route. The Northern Sea Route is investigated as an option to the Suez Canal (Skripnuk et al., 2020). Currently this is further a theoretical issue since the route is only three months ice free. In the coming years however with melting ice in the Artic these routes can be economically feasible and by the smaller dis- 400 Igor Ilin et al. tances can also lead to lower environmental pollutions worldwide. The issues of calculating the logistics chain, considering the minimum possible costs and effective international cooperation on the Northern sea route, remain open. State of Research in Arctic Maritime Logistics 401 References Afenyo, M., Khan, F., Veitch, B. and Yang, M., 2017. 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