The Suez Canal's Epic Journey in Global Trade

A maritime crisis has erupted after a giant ship became stuck in the Suez Canal, disrupting global trade flows. The incident, made worse by Yemen's strategic blockade of access to the canal, shocked international trade. Witness the ripple effects as commodity prices rise in both Asia and Europe, marking a critical moment in the complex web of the global economy.

What do you know about the the Suez Canal ?

In the mid 19th century, French engineer Ferdinand de Lesseps envisioned a revolutionary shortcut that would change world trade the Suez Canal. The waterway, which he completed in 1869, connected the Mediterranean Sea with the Red Sea, creating a direct shipping route between Europe and Asia.

Today, let's dig deeper into the numbers behind this amazing achievement and understand its significant impact on the global economy.

Historical perspective

The construction of the Suez Canal cost him a staggering 100 million French francs, making it a huge investment in the 19th century. However, this was a strategic move that shortened the travel distance from Europe to Asia by approximately 7,000 kilometers (approximately 4,350 miles). This historic engineering achievement opened the floodgates to maritime efficiency and economic transformation.

Global trading hub

A look into the present shows that the Suez Canal remains a busy trading center. More than 18,000 ships ply this waterway each year, transporting approximately $9 billion worth of goods.

This means that a significant proportion of world trade passes through this narrow channel.

International cooperation

The Suez Canal is more than just Egypt's waterway. This is a shared resource. Almost 8% of world trade is based on this route, highlighting its global importance. Countries from different continents rely on the canal for smooth trade, highlighting the importance of international cooperation in keeping the canal open.

Economic impact

Now consider the potential economic impact of a disruption to the Suez Canal. In 2021, the canal suffered a high profile blockage when the Ever Given, one of the world's largest container ships has been held in a lake between two stretches of the canal since being dislodged on March 29, amid a dispute over a $916 million claim by the Suez Canal Authority against Japanese owner Shoei Kisen for compensation over the incident.

Continuous growth

Over the years, Suez Canal traffic and revenue have experienced impressive growth. In 2021 alone, the canal handled approximately 1.17 billion tons of cargo, an increase of 3.8% year on year. This steady increase reflects the canal's adaptability and ability to meet the growing needs of global trade.

Strategic toll collection

The Suez Canal relies on fees collected from ships passing through it to fund its maintenance and improvements. In 2020, the channel generated more than $5.61 billion in revenue, accounting for a significant portion of Egypt's revenue.

This inflow of capital plays an important role in the country's economic stability and infrastructure development.

Employment and community impact

The importance of the Suez Canal goes beyond trade. It is an important employer for local residents. Thousands of Egyptians are directly or indirectly involved in canal related activities. The operation of the canal greatly contributes to job creation and economic development in the surrounding area.

Environmental concerns

While the Suez Canal fosters economic growth, it also raises environmental concerns. Increased traffic and potential accidents threaten the delicate ecosystem surrounding the canal. Balancing economic benefits and environmental protection is paramount to ensuring a sustainable future for this important waterway. In conclusion, the Suez Canal is more than just a canal for ships.