Suez canal crisis and its impact on world economy
Suez Canal has been playing a pivotal role in Maritime trade for 150 years, due to its crucial location in Egypt that connects the waterway between Asia and Europe.
On 23 March, news broke across the globe that a 400m long Japanese vessel called MV Ever Given, en route from China to the Netherlands got wedged diagonally across the Suez Canal’s narrow waterway. It resulted in a havoc situation for world trade. Suez Canal has been playing a pivotal role in Maritime trade for 150 years, due to its crucial location in Egypt that connects the waterway between Asia and Europe.
The 193 km long artificial canal was built between 1859 and 1869 linking the Mediterranean sea and the Red sea, which provides the shortest sailing route between the Atlantic Ocean and the Indian Ocean. So it prevents the ships from navigating around the Cape of Good Hope in Africa, a 7000km long sea route between Asia and Europe.
The blockage could cost global trade more than 7billion Euro a week, a study by German insurer Allianz showed on Friday.
Every year 19000 ships carrying goods pass through the Suez Canal, which consists 12% of World Trade. But after the Canal blockage by MV Ever Given, sea trade have been entirely disrupted.
HMM Gdansk, a South Korean Ship, having the capacity to carry 24,000 20-foot boxes, which is considered as the world’s largest container vessel along with over 421 other ships that have already been stranded near Canal. And this latest Suez Crisis will definitely slow down the world economy as it has already been hit by the Covid-19 pandemic, Winter Storms in the US and flooding in Australia.
50 ships pass through the canal which consists of about 9.5 billion dollars goods worth per day. Which have been totally halted due to blockage.
It led some ships to take a long route through Cape of Good Hope, which adds at least 10 more days to reach European countries. Further, this route is considered a dangerous one due to the fierce winds and piracy.
According to Bruno Werz a maritime archaeologist and head of the African Institute for Marine and Underwater Research based in Cape Town.
” There are at least 2000 wrecks in South African water”.
It shows that accidents and piracy are common in this way.