The Northern Sea Route (NSR) has tremendous potential for ocean shipping between Europe and Asia due to the savings from shorter transit time and distance. However, the Arctic area is environmentally vulnerable and thus there is a trade-off between NSR’s impacts on environment vs. its economic benefits, especially when compared with the traditional route, such as through the Suez Canal Route (SCR). This study estimates the market shares of different transport modes and alternative shipping routes for the container transport market between Europe and Asia, and the resulting environmental costs. Our result suggests that NSR can be a viable option under the status quo. However, its environmental costs tend to be higher than SCR due to small ship size and low load factor in the present, thus the development of NSR would lead to worse environment outcomes. If these issues can be resolved, NSR can benefit from lower operational and environmental costs, which will lead to higher market share and social welfare. Otherwise, increased use of NSR may lead to higher total environment costs than the status quo.

In network models for dynamic traffic assignment the link travel times are often described by “whole-link” models. In particular, they have been expressed as a function of the number of vehicles currently on the link. Such whole-link models are useful approximations and make the network model tractable when flows and travel times are varying over time. Here we propose an alternative whole-link model to approximate travel times. For a vehicle entering a link at time t, we let the link travel time be a function of a weighted average of the inflow rate at the time it enters and the outflow rate at the time it exits. We show that this model ensures first-in-first-out and has other desirable properties. We indicate computational methods for solving the model, apply it to various patterns of inflows, and compare the numerical results with two alternative whole-link models.