Suez Canal:Global Trade Route Disrupted by a Stuck Cargo Ship

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Arav Wahi

The Suez Canal is one of the most important and popular shipping routes in the world. Every day, roughly 50 ships cross the canal that connects the Red Sea to the Mediterranean. While 50 ships might not emphasize the importance of the Suez Canal, its convenience can help others understand. The Suez Canal connects the Mediterranean and Red Sea together, but more importantly gives a much more simple shortcut from Southern Europe to Asia. For example, an oil tanker from Iran bound to Italy will have a much shorter and simpler route traveling through the Suez Canal between Egypt to arrive in Italy. If this same tanker had to make the journey without the canal, it would extend days, if not weeks, to the traverse. This is because the Suez Canal has allowed countries in Asia to travel to Europe without having to circumnavigate around Africa, which will cause extreme inconvenience to trade between the continents, and potentially even halt all trade between the respective countries. Out of the 50 ships that run through the canal, they each carry roughly 1,000 shipping containers respectively which can be composed of a wide array of things such as oil barrels, raw materials, and even parts to everyday things like iPhones. This is where the major importance of the Canal comes into play.

 Without the canal, China, which is a major assembler of iPhones, would have a shipping costs balloon if they had to circumnavigate around Africa just to deliver iPhones to Europe, which again would cost far more money and time. It is no shock this is why the global economy lost $400 million per hour the ship Ever Given was stuck in the canal. In the six days the canal was blocked, the global economy lost $54 billion dollars! That is roughly equivalent to the net worth of Jack Ma, co-founder of Alibaba. So the roughly 300 ships that could not traverse through the canal were halted for less than a week and nearly surmounted one of Asia’s richest man’s net worth! While most in the US were not impacted to a high extent based on the canal blockage, parts of the world suffered tremendously as their economies toiled. 

For example, Egypt, who operates the canal, lost lots of money from the blockage. They have even seized the Ever Given ship, which caused the blockage, and are seeking roughly $1 billion in reparations for the money lost for the ship. There is little information available about the current situation but it seems that Egypt is adamant on receiving fair compensation. While the issue is now old, the repercussions are still being felt by the blockage due to major cargo being blocked by it. This event will go down in history as it shows how dependent the global trade route is on a 120 mile manmade passageway. Now the canal is obviously back to business as usual but this will set precedent for the future if a similar occurrence ever happens.