The new shipping route opened up through the Arctic by climatechange will not be crowded any timesoon.

Cargoes of coal, diesel and gas have made the trip but high insurance costs, slow going and strict environmental rulesmean there will not be a rush to followthem.

Looser ice means icebergs. One vessel has already been holed,and large ice breaking vessels, not always on hand, are amust.

“Significant safety and navigational concerns remain an obstacleto commercial shipping in the Northern Sea route, despite recentmedia reports of 'successful' transits,” said Richard Hurley, asenior analyst at shipping intelligence publisher IHSMaritime.

“AIS (ship) tracking of vessels in the area shows all vesselsare subject to deviation from direct routes as a result of ice, andmany areas still cannot be navigated safely without the presence oflarge icebreakers able to provide assistance such as lead throughto clearerwaters.”

Last month, a dry bulk vessel carrying coal from Canada passedthrough the Northwest Passage to deliver a cargo to Finland, in atrip its operators said would save $80,000 worth of fuel and cutshipping time by aweek.

The world's top oil trader Vitol brought tankers in October withAsian diesel to Europe via the Northern Sea route over Russia,potentially saving hundreds of thousands of dollars incosts.

The fast-growing liquefied natural gas market, in which Arcticplayers like Russia and Norway play a big role, has also seenmaiden Arcticvoyages.

Hurley said the passage of the Yong Sheng cargo vessel in Augustfrom China to Europe via the Northern Sea was only possible withthe aid of the world's largest nuclear powered icebreaker, 50 LetPobedy, to get it through the Lapatev Sea. Ship tracking showedonly four large icebreakers were available at any one time to coverthe whole Northern searoute.

Separately, a small Russian oil products tanker was holed inSeptember in the Kara Sea, also offRussia.

“Even though damage was minimal and did not cause a pollutionincident, the holing revealed fragility of emergency help,” Hurleysaid. “Taken together, all the inherent dangers and concerns overpotential Arctic pollution count heavily against time and costsavings alone when assessing the commercial viability of theseaway.”

INSURANCE ANDCONTAINERS

The market is also still nascent forinsurers.

“The key obstacle here will remain the insurance, as it's stillsimply too risky a proposition for standard commercial insurers,”said Michael Frodl of U.S.-based consultancy C-Level MaritimeRisks, who advisesinsurers.

“The ships aren't ready, the support facilities and portinfrastructure are not yet in place, and the risks haven't beenfigured out enough to price insurancecorrectly.”

Others say the commercial potential is unlikely to be viable forcontainer ships, which transport consumer goods, partly as tradeflows develop beyond China in coming decades towards other regionsincluding Africa and SouthAmerica.

“The further away global trade moves from a totallyChina-centric export pattern, the more a short 'polar' route loosesits appeal,” said Jan Tiedemann, shipping analyst with consultancyAlphaliner.

“The Southern route – even if longer – will always have theadvantage of serving numerous markets at the same time. Think ofthe Middle East. Think of transshipment via the (Malacca) Straitsto Australia and New Zealand. Think of transshipment in Arabia forEast Africa. Think of Med and Black Sealoops.”

Until recent years harsh weather conditions, which can drop to40 to 50 degrees centigrade below zero, had limited Arctic shippingmostly to small freighters and ice-breakers that supplied northerncommunities in Canada, Norway orRussia.

According to French ship classification society Bureau Veritas,there were 40 Arctic route trading voyages in 2012 for all vesselclasses including oil tankers, with around one million tonnes ofcargo moved. That compared with 700 million tonnes transportedthrough the Suezcanal.

Knut Espen Solberg of Norwegian shipping and offshoreclassification group Det Norske Veritas, said dry bulk vesselscarrying coal were best suited for Arctic shipping as the potentialfor environmental potential wasless.

“Oil and container spills have a much bigger potentialenvironmental impact than coal, so their shipping is likely to berestricted heavily,” said Solberg, a former Arctic mariner.