Wednesday, October 20, 2021

Blockages cause long, stressful delays for Suez Canal users

Suez Canal

Suez Canal

Suez Canal

David Batty analyses the place the canal has taken on the global agenda.

Months of blockages have forced the indefinite closure of the Suez Canal, an important shipping artery which serves major global trading destinations.

The canal is one of the most important commercial and transport arteries in the world and brings in some $20bn of cargo every year, the vast majority of which goes to European ports on the continent.

But since early 2018, repeatedly blockages have prevented some vessels from accessing European ports and forced others to redirect via other shipping routes.

On 1 September the first blockage, which lasted a week, shut the waterway down completely and led to a series of delays. However, on 12 October a second ship was able to enter the Canal’s locks, after which the second blockage was lifted.

While a quarter of world trade is carried via the Suez Canal, a further 15% moves through the canal without being cargo ships. Roughly one million tonnes of containers are transported via the Suez Canal every day, with 5,000 containers moving every hour.

An important economic resource

Opportunities for landlocked Ethiopia

Prime Minister Abdullahi Ahmed Sharmarke outlined the importance of the canal in 2015, when he said the Suez Canal is a “key logistical, logistical and industrial facility”, that is projected to serve up to 1.5 billion people in Africa by 2050.

“In terms of the area and the size of the canal, you can compare it to the current Lake Chad, so it is of extreme importance for Africa,” he said.

The canal is a strategic treasure-trove for any number of economies.

According to CNBC’s Juan Pablo Lopez, a spokesperson for the Chong Hock Tang, the vehicle carrier which was the first ship to navigate the canal after the first blockage in September, said the massive cargo vessel paid “rewards with scale” after the last blockage:

“After stopping for two days in Alexandria, we delivered to Antwerp on 9 October and sailed down the straits of Gibraltar the next day.”

He also noted the role played by Eritrea, which has benefited from a significant amount of trade in the last decade. That trade has been hindered by a long border dispute with Ethiopia, which has made it difficult for the two countries to share a free access route.

Eritrea agreed to let its countrymen cross the border after Ethiopia’s Prime Minister Abiy Ahmed came to power.

“This deal was confirmed on December 5, 2017,” said Mr Lopez. “Eritrea will allow international vessels and charter dhows/ fishing boats and will also allow the Suez Canal navigation, which will help reduce the cost of transporting Eritrean products by sea to the market.”

The location of the canal, a former Red Sea desert, is in a region that is mostly dominated by Egypt’s largely Christian south, where smuggling is a common and violent business practice.

But the ship’s waterway was once the territory of Egypt’s Muslim north, extending down to Saudi Arabia and Jordan. The Suez Canal is a direct route for ships that were once trying to cross the Mediterranean Sea to sail to the rest of the Middle East.

Although the canal is part of Egypt’s territory, it is technically a southern international, rather than a northern Egyptian waterway.

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