A massive cargo ship has turned sideways in Egypt’s Suez Canal, blocking traffic in a crucial East-West waterway for global shipping.
Back to Basics
- 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.
- Constructed by the Suez Canal Company between 1859 and 1869, it officially opened on 17 November 1869.
- The canal was earlier controlled by British and French interests in its initial years but was nationalized in 1956 by Egypt’s then leader Gamal Abdel Nasser.
- It extends from the northern terminus of Port Said to the southern terminus of Port Tewfik at the city of Suez.
- Its length is 193.30 km including its northern and southern access channels.
Importance of Suez Canal
- The Suez Canal provides a crucial link for oil, natural gas and cargo being shipping from East to West.
- It provides a major shortcut for ships moving between Europe and Asia, who before its construction had to sail around Africa to complete the same journey.
- The importance of the canal stems first and foremost from its location; it is the only place that directly connects the waters of Europe with the Arabian Sea, the Indian Ocean and the countries of the Asia-Pacific.
- Around 12 % of the world’s trade flows through the waterway and it remains one of Egypt’s top foreign currency earners.
- As per a report, the canal is a major source of income for Egypt’s economy, with the African country earning $5.61 billion in revenues from it last year.
- The canal’s strategically important position now means it hosts nearly 19,000 vessels each year, according to Lloyd’s List, a shipping industry journal.
- More than 80% of global trade by volume is moved by sea, and disruptions are adding billions of dollars to supply chain costs. Globally, the average cost to ship a 40-foot container shot up from $1,040 last June to $4,570 on March 1, according to S&P Global Platts.
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