The potential effects of the closure of the Suez Canal on World Trade

 

A satellite image shows the cargo ship Ever Given stuck in the Suez Canal on Sunday.

(Planet Labs Inc.)

 

The Suez Canal is an artificial sea-level waterway in Egypt, connecting the Mediterranean Sea to the Red Sea through the Isthmus of Suez and dividing Africa and Asia. The canal enables more direct shipping between Europe and Asia, eliminating the need to circumnavigate Africa and cutting voyage times by days or weeks. The Suez Canal has been considered, since its establishment in 1869, as the most important artery and waterway for world trade between East and West. It is the most important waterway for moving petroleum between the production sources and consumption markets. In other words, one of the most significant maritime “shortcuts” ever built. It brought a new era of European influence in Pacific Asia by reducing the journey from Asia to Europe by about 6,000 km by skipping a detour around the Cape of Good Hope. Britain benefited the most from the construction of the Suez Canal. Their trip from London to Bombay was reduced by 5,150 miles. Since the British controlled Egypt the Suez Canal was under their command. They were able to reach their territory in the Arabic Peninsula readily enforcing their rule and conducting trade. Prior to the pandemic, trade passing through the Suez Canal contributed to 2% of Egypt's GDP, according to Moody's. Separately, data from Lloyd's List showed the stranded ship was holding up an estimated $9.6 Billion of trade along the waterway each day.

 

Sailing in the Atlantic Ocean in the west side of Africa is smooth and does not require the very performing navigational aids as most ships navigate along the coast from zone A1 to A3 and beyond. This is due to the fact that the African sailors are very familiar with this path and just by instincts can navigate their waters safely. In addition to this, the flow of water can tell if a storm is on its way to a regular seafarer. The disadvantage of Hurricanes, beach dangers, harmful algal blooms, Hypoxia, Oil and Chemical Spills, and tsunami that are like a season to the UK and some other continent are not found in African waters. The closure of the Suez Canal will increase the amount of ships using the west part of the African Ocean. Thus, a massive overcrowding event begins which will slowly but surely lead to about 200 more cases of annual marine accident investigations. Demand for specialist investigation will be raised and those opening job vacancies; who would not want someone that can save him millions of dollars wealth of damages. These collision incident aggravations will force the UK and other nations to take a major path in the shipping industries by recapitalize their resource which will increase the shipping market cost. As a result, West Africa will have the charge dues to all non-member ships that enter into their waters unauthorized. This will cause West African ships to become more proactive at their jobs.

Britain benefited the most from the construction of the Suez Canal. Their trip from London to Bombay was reduced by 5,150 miles will no longer be the same since the blockage of the canal. The amount of time and distance for all ships that use this shortcut in navigating will have to be re-evaluated. The burning of fuel will increase irrespective of the amount of vessels the Suez Canal affected. Africans will take this opportunity to exploit the foreign ships in their waters. Shipping of cargoes will be redirected to African shippers as they are more use to their coast leading to an increase in the number of shipments on the west side of Africa. More shippers will have to register at member’s flag state in African water so as to avoid the extra fees paid by non-member flags and their limitations, when it comes to navigating the Atlantic West African sea waters. The International Maritime Organization will have to take action on the obligations of the sailor to the cargo owners like, the vessel’s sea worthiness, vessels integrity, and hull and voyage worthiness of the vessel. Deviation to avoid danger being also a factor as numerous vessels will be sharing the same route.

In the business world today, it’s plus to take the advantage of your enemies disadvantage to make yourself some cash while it last. The same goes for the shipping business. Port charges in west ports of West Africa will double or triple depending on how useful the ports become; as for that aspect, the pandemic makes thinks easier. For 6 days , most business around the world where on the verge of crumbling, as no customer once to be noticed that, the product he ordered for is still on the way for no matter the reason if the due date has arrived or exceeded. Except the delay helps them increase the price of the commodity they are about to resell in bulk. As the white man usually says, “No hard feeling brethren, it’s just business”.

 

 

Conclusively, the canal Authority in view of the event with due regards to world trade effect and other potential minor occurrences should indeed pursue legal action against the ship and its crew of the Ever Given container 20,000TEU vessel for obstructing a major shortcut shipping route used worldwide that has the potential; to increase the price of living of hard-working citizens in the world. This will serve as a lesson to all vessels that shortcut come with consequences.