The Federal 'Northern Supply Act' was enacted in August 2023 and is set to fully come into effect by 1 April 2024. This marks the culmination of extensive efforts to organise cargo delivery to remote Arctic settlements, a process that spanned nearly 25 years, and simultaneously, ushers in a new epoch in the Russian Polar region's history. Presently, federal and regional authorities, major corporations and society at large are tasked with the ambitious goal of developing a new northern supply system leveraging advanced technologies and contemporary infrastructure.

New game rules

The new northern supply system is currently in its formative stages—the primary law has defined the parameters within which it should be established. As per Gadzhimagomed Huseynov, First Deputy Minister of the Ministry for the Development of the Russian Far East and Arctic, five bylaws are under consideration as of early autumn 2023, with an additional nine set to be forwarded to the State Duma in October. He disclosed this during the EEF 2023 session titled 'Northern Supply Management System: A New Reality'. These documents outline the establishment of a unified digital contour with centralised management and a single federal coordinator that will oversee the system. The coordinator will be responsible for executing state policy, coordinating federal and regional authorities for its implementation, managing the Federal State Information System of the northern supply, approving shipping schedules and routes, and planning for a three-year period.

Once fully operational, the system is expected to alleviate infrastructural limitations in Russia's Arctic region and establish an ecosystem that ensures cargo delivery to the most remote areas. Currently, the price of goods in the Arctic and several Far East regions is two to three times higher than those on the 'mainland.' Nikolay Kharitonov, Chairman of the State Duma Committee of the Federal Assembly of the Russian Federation for the Development of the Far East and Arctic, underscored that any construction of social facilities within the northern logistics framework necessitates increased expenditures. He illustrated this with the example of school construction in Anadyr: piles for its foundation were transported from St. Petersburg to Vladivostok by train and then shipped to the capital of Chukotka.

After the implementation of the law 'On Northern Supply,' the price of goods for final consumers in the Arctic is expected to drop by two to three times. This will be achieved not only through subsidies and preferential loans for those involved in the process but also by establishing a centralised system for processing orders and delivering goods, along with a distinct transportation operator. This operator will determine the maximum permissible freight transportation cost and will also handle the transportation if other companies are unable or unwilling to undertake the delivery.

Nation needs vessels

The restoration of port infrastructure and fleet renewal were among the key topics discussed at the EEF session. In the Arctic, river routes are critically important for carrying out northern supply, and they are currently under intense scrutiny. For example, work is needed to deepen the seabed and reinforce the channels of Arctic rivers in crucial areas, ports need new equipment, berths need repairs, and so on.

The fleet has also not been upgraded for years. Vladimir Panov, Rosatom State Corporation's special representative for Arctic development, stated that no Russian companies have commissioned a single supply vessel at shipyards in the past decade. He attributes this to the previous inability to plan cargo transportation—a new ship might be needed one year, but then spend the next two navigations idle at the dock. The introduction of a centralised order system will make this issue a thing of the past.

Delivery diversification

Not only ships will transport goods to the North. Alexey Shilo, Head of the Centre of Corporate Transportation Services (CCTS) of Russian Railways, emphasised the need for diversification of logistics routes and ensuring uninterrupted supplies. This is expected to significantly expedite delivery, while enhancing the level of control over transportation for both recipients and senders. As of now, Russian Railways has successfully established a cargo labelling system for Northern supply and is prepared for integration into the global digital ecosystem throughout the AZRF. Plans are also underway to develop autonomous cargo delivery systems, although they are currently in the development phase. At present, the existing capabilities do not permit the creation of an efficient system—the Arctic is unforgiving towards advanced technologies.

The session also touched upon the experience of Yakutia, which is intended to be expanded across the entire Polar region. Maintaining a steady stock of goods and a consistent supply chain, achieved by establishing trade and logistics centres along the routes. These centres allow for independence from the 'mainland'—if weather conditions disrupt access to remote settlements, residents always have a supply of food and fuel for several months in advance.