Three Longs & Three Shorts

Why a Canal Built in 1869 is More Important Than Ever

The 3L&3S has been featuring pieces about the bottlenecks in global trade caused by container shortages amongst other reasons. In a bizarre event, earlier this week, global trade has been dealt another hard blow from the most unforeseen of places. EverGiven, a massive container ship, taller than the Eiffel Tower is high, whilst sailing through the Suez Canal, got pushed off course by heavy winds eventually sailing aground and blocking the entire canal for traffic for almost four days. Hopefully by the time this edition is out, evacuators may have succeeded in pulling it out and letting traffic flow back to normalcy. Whilst it is worth googling the images of the gigantic boat stuck in the canal and why it has been so hard to move it out of its place, this piece is less about the boat and more about the canal and its history and importance to global trade.
“The 193 kilometer (120 mile) man-made waterway cuts through Egypt to connect the Mediterranean Sea to the Red Sea, and by extension the Atlantic and Indian oceans. That makes it a key transit point for ships moving goods between Asia and Europe and the eastern U.S. It entered service in 1869, 45 years before the Panama Canal, which is much shorter, linking the Pacific and Atlantic oceans. The sea-level canal is the longest in the world without locks, with a normal transit time from end to end of about 13-15 hours, according to GlobalSecurity.org.
About 12% of world trade passes through the canal each year, everything from crude oil to grains to instant coffee. Without Suez, a supertanker carrying Mideast crude oil to Europe would have to travel an extra 6,000 miles around Africa’s Cape of Good Hope, adding some $300,000 in fuel costs (although there would be savings from avoiding the Suez passage tolls, which can run hundreds of thousands of dollars.) Because it has no locks, it can even handle aircraft carriers.
Just about every good imaginable, adding up in 2019 to 1.03 billion tons of cargo, according to the Suez Canal Authority. That’s roughly four times more than passed through the Panama Canal. The canal’s location makes it a key link for shipping crude oil and other hydrocarbons from countries such as Saudi Arabia to Europe and North America. Among other goods, 54.1 million tons of cereal passed through the canal, 53.5 million tons of ores and metals and 35.4 million tons of coal and coke in 2019.”