Suez Canal remained the brewing topic from news headlines to meme templates and social media posts for the past few days. This started after a giant container named Ever Given blocked the strategically vital sea route.
Let’s start with understanding what the Suez canal is and its importance in today’s world.
Suez Canal is an artificial canal or waterway that connects the Mediterranean Sea and the Red Sea through the Isthmus of Suez. It divides Africa and Asia and is located in Egypt.
The construction work for the Suez Canal started in the year 1858 after French diplomat Ferdinand de Lesseps formed the Suez Canal Company. The construction began in 1858 and ended in 1869. It was the time of the Ottomans. The date when the Suez Canal was officially opened was November 17, 1869.
The purpose behind the canal’s construction was to reduce the journey distance between the Arabian Sea to London. The canal provides a direct passage to ships and containers between the North Atlantic and the northern Indian ocean without passing through the South Atlantic and the southern Indian oceans. The travel distance between the Arabian Sea and London was reduced by 8,900 kilometers or 8 days after the canal’s construction.
Importance of Suez Canal
From business to geopolitics and from peacetime to war, the Suez Canal’s importance on the world’s map is pretty high. It is as important as a strategic strait.
The canal was nationalized by the former Egyptian Prime Minister Gamal Abdel Nassar in July 1956. Before that, the company that constructed the canal was owned by the European shareholders- mainly British and French.
Apart from business and transportation, the canal is very important for navies in the region. At the beginning of the Six-Day War, Suez Canal was closed by Egypt on June 5, 1967, and it couldn’t open back before June 5, 1975. Until then, the canal was a single-lane passage.
Until this period, only 49 ships could pass through the canal in a day. Then in 2014, the Egyptian government planned to widen the canal to expand its capacity. The plan was to widen the Ballah Bypass by 35 km.
The widening of the bypass was completed successfully, and the “New Suez Canal” was opened for public use on August 6, 2015.
A new side-channel of the canal was opened in 2016.
Now we have jumped to the most recent topic related to the Suez Canal.
A huge traffic jam occurred on the Suez Canal as the traffic on both sides was blocked on March 23, 2021, around 5:40 UTC. This happened as a Golden-class container ship Ever Given turned sideways after being blown off the course by strong winds. The ship got stuck at a point where the canal has only one channel, and as a result, the entire traffic was blocked.
This resulted in a huge loss to the world business. Many ships had to take alternative, longer routes amid the blockage. The ship remained stuck for nearly a week before it refloated. On March 29, after continuous efforts by the local authorities. As many as 450 ships that were waiting amid the blockage then passed through the canal. However, the blockage on Suez Canal was long enough to cause losses worth $1 billion.
Importance in Global Trade
The canal holds significant importance as far as global trade is concerned. The first full year of the canal’s operation was in 1870 when there were just 486 transits in the entire year. This number climbed up to 21,250 transits in 1966. However, the number of transits decreased with time, but the annual tonnage kept on increasing. In 2018, there were 18,174 transits with 1,139,630,000 metric tons of annual tonnage.
The canal recorded a record net revenue of $5.585 billion in 2018. The number kept on increasing before falling by a mere 3% in 2020.
Importance of Suez Canal for India
Like any other major economy globally, the Suez Canal is crucial for India, especially when it comes to trade and supply. The canal reduces the travel distance between India and Europe by 7,000 km. It is a strategic waterway for India as goods can be transported easily using this secure channel. From oil delivery to the export of goods in Europe, India uses the Suez Canal for more than one purpose. It is also an important route for business ties between India and Russia.