The importance of the Suez Canal can be understood pretty easily because its blockade created a worldwide drama for the spectators.
If you have been following the news in the last few months then it’s likely that you have heard about the Suez canal blockage. Owning to the news circulating you probably have a good idea that the Suez canal is a pretty big deal and when it got blocked on 23rd March 2021, it not only caused the loss of billions of dollars but also created a worldwide frenzy.
Even though the Suez canal holds great importance for world trade, surprisingly, not many people know about it and the ones that do, don’t have enough information. The Suez Canal is an important trade route that allows goods to be shipped from one continent to another without any difficulty.
What is the Suez Canal:
Suez Canal is a man-made waterway that stretches up to 193 kilometres (120 miles). The Suez canal holds a lot of importance because it is an important route for trade between the continent of Europe and Asia and the Eastern U.S. The Suez Canal is located in Egypt and connects the Mediterranean and the Red Sea. Suez Canal began its service in 1869 and has then revolutionised international trade. Trade between Europe and Asia is not easy but through the Suez Canal, it has been made a lot faster and cheaper.
The Suez Canal is the longest sea-level canal in the world which is without any locks. Meaning a normal sea transit takes around 13-15 hours through the Suez Canal.
Importance of the Suez Canal:
The Suez Canal is very important to world trade. Its importance can be understood by considering what happened when it got blocked. After the blockage of this canal in late March, billions of dollars were lost by traders. The Suez Canal is the route to around 12% of world trade. Trade between Europe and Asia has always been complicated and rather tricky. This is why the Suez Canal has played a huge role in resolving this issue and making trade easier, cheaper, and faster. All kinds of trade are done with the help of the Suez Canal. It is a cheap and convenient method to get ships across long distances in a short amount of time. Shipments of items including crude oil, instant coffee, and so much more are made through this canal. Due to the ideal location of the Suez Canal, it can easily transport crude oil from Saudia Arab to America and European countries. Which furthermore increases its value and importance as a trade route.
The important trade route between Europe and Asia:
Trade through Asia and Europe was never easy. Many people dreaded spending the long hours at the sea just to get to another continent. The introduction of aeroplanes did not do much benefit either as air flights are expensive and can cause a lot in comparison to ship travel. This is why the Suez canal is so convenient. It is an easy pathway to get from one continent to another in a relatively short time and it is also cost-effective. You won’t be spending a fortune every time you need to do a trade.
The Suez canal is situated in Egypt which is the biggest important feature of the Suez canal. Trade between countries like India, China, Saudi Arabia to countries in Europe and America is made much easier through this route. The geographical location of the Suez Canal is ideal for all the countries and is a huge plus point for international trade.
Saves money and resources:
Another reason why the Suez canal is so important is that it saves money and other resources such as time.
If the Suez Canal had not been built, traders would have to travel across Africa’s cape of hope which is around 6000 miles more than it crosses now. This would eat up a tremendous amount of fuel averaging around $300,000. But with the help of the Suez Canal, this issue is resolved without any problems. It also saves up time because travelling from Europe to Asia and vice versa using travelling through Africa first is a lot longer trip than using the Suez Canal.
Who built the Suez Canal and who owns it now?
During the mid-century, a French company was granted a concession by Egypt’s Ottoman viceroy Said Pasha to build this canal.
This project was completed in 10 years and after tremendous labour. The fact that this canal is man-made further makes increases its importance and value.
This project cost around $100 million ($1.9 billion today) which was twice the initial plan on spending. Around 1.5 million labours worked on this project for 10 years and completed the marvellous canal that it is today.
After much hard work, the canal began its services in the year 1869, but soon afterwards the French owners faced financial setbacks which forced them to sell a controlling stake to the U.K. The U.K. ran the canal for eight decades after this.
Even though the U.K. controlled the canal through the two world wars, they eventually withdrew their forces in 1956 after years of negotiations with Egypt. This made the Egyptian government led by President Gamal Abdel Nasser the main authority over the Suez Canal.
The Suez Canal is a huge source of the income generation of Egypt. In 2015, an $8 billion expansion plan was launched to increase ship traffic and further increase the amount of revenue generated through this canal.
The Suez Canal might be one of the most important trade routes of the world, but it is also a tight fit. Meaning the ships that go through this area need to be propelled with perfection to avoid any inconvenience. Such an issue raised because of the Evergreen, the ship that blocked the Suez Canal. Furthermore, this blockage only proved further why this canal is so important to world trade and us.