By Clay Dillow
August 28, 2013

FORTUNE — In early August, the 21,000-ton shipping vessel Yong Sheng pulled out of the northeastern Chinese port of Dalian bound for Europe. But instead of setting a southerly course that would take the ship through the Strait of Malacca and across the Indian Ocean to the Suez Canal and European markets beyond, the Rotterdam-bound Yong Sheng turned northeast, toward Alaska and the Arctic Circle. It is the first Chinese commercial cargo ship to attempt the Northeast Passage, a shortcut that runs north around the Eurasian continent, shaving as much as two weeks off the journey from China to Europe, China’s largest export market.

A warming climate and melting ice sheets are opening up Arctic sea lanes for longer and longer periods each year, creating a three- to four-month window in which conventional ships can operate amid the ice flows and icebergs above the Arctic Circle. But the Northeast Passage, like the long-sought Northwest Passage across the icy waters north of Canada, remains a treacherous place for ships to operate, especially those lacking ice-hardened, reinforced hulls. For the commercial interests that want to operate there — primarily oil and gas exploration companies and commercial shippers — all that melting ice represents something of a double-edged sword, allowing conventional vessels into the Arctic while at the same time making it a more dangerous place to operate as ice floes and other potential hazards become less predictable.

A few years ago, defense contractor Raytheon (RTN) began developing a new Arctic navigation system that allows conventional, non-ice-hardened ships to operate in the Arctic not through reinforced hulls or better icebreakers, but through better information and enhanced situational awareness. By merging data from an increasing number of sources ranging from legacy technologies like satellites and sonar to next-generation systems like unmanned aircraft and submersible underwater robots, the company has created a tidy software solution to a vexing hardware problem — a means to navigate the Arctic with precision in a conventional, non-ice-hardened hull. The U.S. Navy, eager to expand its own Arctic capabilities, has already taken the technology for a successful 30-day spin through the Arctic in a conventional, non-reinforced vessel. And as higher average temperatures continue to open up sea lanes, the Raytheon Arctic Monitoring and Prediction (RAMP) system could potentially open the once-impassible Arctic to a commercial shipping industry that moves more than $4 trillion worth of cargo over the ocean every year.

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“One of the biggest challenges up there is maintaining vigilance with respect to ice and ice floes,” says Tim Raglin, program manager for Raytheon’s innovation and prototyping team. “Even in waters that are termed ‘ice free,’ we discovered that that’s a misnomer — that actually means they’re mostly free of ice, that there’s still icebergs and other ice hazards in the water. So there’s a critical need for situational awareness up there, and unless you’re going to go to the expense and effort to redesign and ice-harden a number of ships, this is a very cost-effective way of enabling Arctic operations.”

The lack of situational awareness in the Arctic stems from several problems inherent in the Arctic itself. There are relatively few satellites — communications, mapping, or otherwise — covering the Arctic, so there’s very little information for ship navigators to access as well as limited means to transmit or receive it. Likewise, since there are so few ships operating there, there’s little anecdotal information shared between vessels. The Arctic is something of a data desert, leaving navigators to pilot blindly in some of the world’s most unforgiving waters.

In this context, RAMP serves as an oasis of information. Optimized for the Arctic’s low-bandwidth environment (“During the Navy demo we had to come up with some clever ways to pack and unpack data above the 70-degree mark,” Raglin says. “They got to see some high-res imagery they weren’t used to seeing up there”), RAMP meshes everything from conventional weather and oceanographic data to real-time X-band radar satellite imagery to radar and sonar data from the ship’s own sensors, data that usually comes to the bridge independently rather than integrated into a clear picture of the maritime environment around the ship. The system can accommodate more than 200 different data types, so each ship doesn’t have to have access to the same kinds or sources of data. The power of RAMP, Raglin says, is that it takes whatever information a vessel can give it and uses it not only to identify threats, but to predict where threats are emerging, as well as where passable sea lanes are opening up or which potential route is the safest.

“Essentially what it does is bring together a disparate set of information and data, both native to the ship and remote sensor information,” Raglin says. “We worked with [the Navy] to bring a subset of unique and brand new, cutting edge technologies, and data sources together into a single system that we then deployed on a couple of laptops aboard the USS Porter in the Arctic, just to show the art of the possible. But this is the tip of the iceberg with respect to what kind of information and technology we can bring to bear.”

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Many of those technologies and information sources are only now becoming sophisticated and affordable enough for commercial vessels to deploy. Satellites, radar, and sonar have for years provided data from a distance, but their resolution can leave something to be desired. Increasingly mature technologies like unmanned aircraft that can fly ahead of a ship scanning for potential hazards and unmanned surface or submersible robots that can likewise seek out submerged threats ahead of a ship provide far more usable data and are increasingly employed by oil and gas exploration crews and other commercial entities (just this month the FAA certified two unmanned aircraft for use in the Arctic, the first certifications to their kind). All of that high-resolution data can be fed into systems like RAMP to drastically enhance their accuracy and reliability.

The Navy is interested in technologies like RAMP for all the obvious reasons. The kind of situational awareness provided by RAMP could one day allow the existing naval fleet to operate more freely in the Arctic environment without major hardware upgrades or having to design and procure new purpose-designed, Arctic-optimized ships. But what’s good for the Navy is good for commercial interests as well. Systems like RAMP won’t open up the Arctic overnight, but some analysts already predict that up to 15% of China’s total foreign trade (its foreign trade volume was $3.87 trillion last year) could shift to Arctic routes within the next seven years. RAMP, or something like it, will undoubtedly accelerate that shift, Raglin says.

“By putting RAMP on the ship for 30 days and operating, we were able to demo to the Navy that with the right tech in place and the ability to integrate this into the ship’s navigation system, you can put ships in the Arctic without reinforcing hulls, without icebreakers,” Raglin says. “The same tech can be leveraged for commercial activities, for oil and gas exploration, for shipping, for eco-tourism. We’re seeing more opportunities for ice-free summers in both the Northwest Passage and the Northeast Passage, and we’re going to see a lot more activity there. The more and more traffic that gets up there, the more viable it becomes.”

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