Northeast Passage SWOT-analysis

SWOT analysis is one of the methods of strategic planning. It helps to evaluate factors and phenomena that affect the project. All factors fall into four categories: strengths, weaknesses, opportunities, and threats. SWOT analysis usually does not contain economic categories, so it can be applied to any objects, phenomena, and processes. Consider the Northeast Passage SWOT-analysis.

The file that you can download on this site at the bottom of the page contains a list of facts for SWOT analysis not only for the Northeast Passage, but also for any other business.

The Northeast Passage SWOT analysis example

Depending on how optimistic or pessimistic you are, you can start solving the Northeast Passage SWOT analysis example from any half – Positive or Negative influence. Everything in life has 2 sides, so when we write down the strengths of our internal environment in one column, it is better to think about their reverse side at once. Of course, it is not necessary that it will be, but you need to think about it. For example, there is nothing wrong with having an MBA degree, that I have, but on the other hand, any education limits our imagination and ideas about what is possible.

For example, in my SWOT analysis: the fact that the Northeast Passage passes far from warm seas, where piracy is developed, is good and safe. On the other hand, in warm seas, the infrastructure for rescuing both ships and crews is more developed, and there are still large gaps in the Russian rescue system on the Northeast Passage, which puts security at risk.

If you look from the pessimist point of view, then, for example, in the SWOT analysis of the Northeast Passage worsening economic situation may on the one hand lead to reduced turnover in the sea, but on the other hand, may just stimulate carriers to reduce freight costs and a better use of the Northeast Passage.

Positive effectAdverse effect
Internal environment Strengths (a project or team properties, that give advantages over others in the industry)
1. The distance between Murmansk and Yokohama is 5770 instead of 12840 nautical miles across the Suez canal, which can lead to time and fuel savings.
2. Lower workload of the Northeast Passage, so ships do not have to wait for their turn. Freight costs are reduced.
3. No pirates.
4. There is no limitation of vessels by tonnage and size.
Weaknesses  (properties that weaken the project)
1. The Northeast Passage runs through many straits with different legal status, which complicates logistics.
2. A lot of time for permits processing by the Russian side can reduce time savings.
3. An insufficiently developed water rescue system and poor communication make sailing dangerous.
4. Icebreakers that currently serve the Northeast Passage are not large enough, so for large ships they need 2 at once, and this increases the cost of transportation.
5. Most ports do not have the necessary infrastructure for container ships, and the tariff policy is not balanced, which can cause additional delays and costs.
6. The Northeast Passage has only 2 deep-water ports Murmansk and Sabetta. In the future, it is planned to use the deep-water part of the Arkhangelsk port. This imposes additional restrictions on large vessels that can only enter these ports.
External environmentOpportunities (external probable factors that provide additional opportunities to achieve the goal)
1. The increase in mining leads to the port infrastructure and icebreaking fleet development.
2. Accidental or deliberate delivery of flora and fauna representatives from other regions in a warming climate will help the fruit and berry or vegetable crops development, and enrich the animal world of the Arctic.
3. Warming in the Arctic reduces the Northeast Passage’s ice cover, increasing the operation period without icebreaking support.
4. The port development infrastructure will create new skilled and low-skilled jobs, which will give jobs to both local residents and attract new specialists to the Arctic.
5. State support for the Northeast Passage development project.
Threats (external likely factors that may complicate the achievement of the goal)
1. The port infrastructure is developed only for the mining industry operating in this region needs, i.e. the port is not able to receive and serve other purposes vessels. And the icebreaker fleet is only engaged in extracted raw materials transportation.
2. Warming in the Arctic poses a threat to the buildings and infrastructure foundations that were designed for permafrost.
3. The increase in passenger traffic, as well as the occasional animals import from other regions, can provoke epidemics in Northeast Passage cities, where both people and animals will suffer.
4. Warming may negatively affect the Arctic seas. There may be waves, wind, iceberg formation, and the Russian coast erosion.
5. Increasing cargo turnover will increase environmental risks and environmental organizations discontent. Norway has closed its ports to Northeast Passage.
6. The Russian Arctic is losing population, so the Northeast Passage infrastructure developing may not have enough personnel. Both qualified and low-skilled.

As you can see from my Northeast Passage SWOT-analysis example, there are still more negative factors on the Northeast Passage than positive ones. This is what hinders the development of transport on the Northeast Passage and tax incentives will not help here.