Growing political troubles in Egypt could lead to national revolution. Will the Suez Canal and ports in the region continue to function during the unrest? Can the shipping industry depend on Suez Canal managers to keep one of the world’s most important waterways functioning?
The Suez Canal is a sea level waterway. It contains no locks along its 120 mile (192 Km) length and takes about fifteen hours to complete the passage. In 2010 the Suez Canal was dredged to a depth of 66 feet (20 M) which allows 60% of the world’s bulk tankers to complete the transit.
A natural choke point for shipping globally, the Suez Canal funnels a huge amount of traffic into a narrow waterway. At the narrowest point it measures only 1000 feet (305 M).
A single large vessel, if scuttled at the ideal location, can obstruct the canal and stop traffic until salvage can be completed. If the ship is laden and carrying a cargo which will be difficult to lighter the task will increase in difficulty. If armed resistance is encountered it may be impossible to reopen the canal until the situation is resolved.
Cargo of crude oil loaded at Red Sea terminals must transit around the southern tip of Africa if they are unable to use the Suez Canal to reach Europe and parts of North America. This voyage is a longer and more dangerous route with strong seasonal storms.
Revolution in Egypt will also interrupt port operations throughout the country and possibly the region. Although port facilities are built as secure areas to avoid criminal activities insurers and ship owners might be reluctant to operate at these locations. Foreign companies with offices in these ports could also suspend business because of safety concerns or lack of services for their employees.
Loss of revenue for Egypt will also result from a slowing or stoppage in ship traffic. In the first eleven months of 2010 almost 4.5 billion dollars in tolls were collected by the operating authority.
Latest News
Crowds of Protesters Defy National Curfew and Fill Egypt’s Streets and Squares – January 25, 2011
National Protests Continue, President Mubarak Reaffirms Authority – January 28, 2011
The City of Suez has a total of thirteen reported deaths due to rioting – January 28, 2011
Crude Oil Reaches US$100 a Barrel Because of Suez Canal Shipping Concerns – January 28, 2011
Shippers are Refusing to Load Crude Oil Cargo at Red Sea Terminals for Transit Through the Suez Canal – January 28, 2011
History
The Suez Canal goes back to ancient times. It was first excavated by Senausret III, Pharaoh of Egypt (1887-1849 BCE).
The modern Suez Canal construction began in 1859 and took ten years to complete.
In 1956 the Egyptian government nationalized the Suez Canal causing Britain and France, who held an interest in the canal, to respond with military forces. Egypt sank forty ships in the canal in response to the “Suez Crises”. International intervention eventually ended the confrontation and resulted in the formation of the Suez Canal Authority which runs the canal today.
In 1967 the Suez Canal was closed because of fighting during the Six-Day War with Israel. The canal was damaged during the fighting and remained closed until 1973. Egypt did not regain full control of the canal until 1975.
In 2009 the Suez Canal carried 8% of global shipping traffic.
