As the Suez Canal shipping crisis abates, we profile global trade's other key sea arteries ​

Tue 30 Mar 2021
Posted by: Noelle McElhatton
Trade News

Last week’s blockage of the Suez Canal by the 200,000 ton container vessel Ever Given underlined the fragility of the world’s trade highways.

The six-day blockage is estimated to have held up $9.6bn goods every day according to the BBC. Around 450 ships were delayed in transiting the canal with some commentators saying that the world’s ports could be dealing with the outcome for weeks, or even months, as reported in the IOE&IT Daily Update.

But as freight resumes through one of the world’s main shipping lanes, a passage that carries 12% of global trade, questions about other potential choke points are being considered.

Majority of trade by sea

Around 90% of the world’s trade moves by sea according to Container Exchange.

While the likelihood of a repeat of the Ever Given incident is low, the financial losses incurred suggests that shipping companies may need to rethink their vessels, the Maritime Executive reports.

Crosswinds, blamed for blowing the Ever Given into the banks of a narrow channel, could require increasingly large and unwieldy vessels to retrofit bow thrusters.

Future regulation could require that thrusters be ready for deployment when a ship sails through the Suez Canal.

Choke points

Writing in Time magazine, retired admiral James Stavridis said the latest Suez crisis demonstrated that a fundamental lesson had to be relearned about the “criticality of a handful of so-called ‘choke points’ around the world”.

“These are spots where traffic patterns collide, and the tens of thousands of ships underway on the world’s oceans at any given moment come together in tightly managed traffic schemes,” he said.

Aside from the Suez Canal, Stavridis names other major maritime choke points:

1. Panama Canal

The Panama Canal is one of the two most important artificial waterways in the world, the other being the Suez Canal, and as such is considered a barometer of world trade.

Close to 14,000 vessels use the route every year, carrying about 5% of world trade reports

The canal shortens the voyage between the Pacific and Atlantic Oceans by about 8,000 miles and cuts the 67-day transit time to just 10 hours. Ships sailing between the east and west US coasts would otherwise have to sail around Cape Horn in South America.

As a lock-type canal, the Panama Canal requires pilots to board ships before passage.

Panamax and New Panamax (or Neopanamax) are terms for the size limits for ships travelling through the canal, with limits and requirements published by the Panama Canal Authority (ACP).

Building the canal (1903-14) was overseen by US president Theodore Roosevelt and was US-owned until 1999 when it passed to the Republic of Panama.

In 2016, Panama opened the long-delayed $5.4bn expansion, which triples the size of ships that can travel the canal.

2. Strait of Malacca

The Strait of Malacca separates the Pacific and Indian Oceans and is the world’s busiest strait, carrying some 25% of the world's traded goods. About a quarter of all oil carried by sea passes through the Strait.

Piracy, once a problem in the Strait of Malacca, has dwindled. However, the sheer volume of traffic and its narrowness make it hazardous, with 60 shipping accidents in 2015, the Atlantic reported.

3. Bosporus Strait

The Bosporus Strait separating the Aegean and Black Sea is a busy and sinuous route for shipping. At one point ships have to make a 45-degree turn, which is not easy with a big ship at full speed, reported AA Energy.

A total of 41,112 vessels carrying a total of 638.9 million gross tons of cargo passed through the Bosporus Strait in 2019, reported AA Energy.

Turkey’s President Erdogan is building a $12.6bn 28-mile canal to reduce traffic running via the Strait which passes through the city of Istanbul. The controversial mega-project is due for completion in 2025-26.

4. English Channel

Closer to home, the English Channel is the busiest shipping lane in the world with 500 ships passing through it every day.

The shortest crossing is the Dover Strait (90 minutes) and evidence of its historic role in trade came in the 1990s with the discovery of a 3,300 year old oak boat near Dover (known as the ‘Dover Boat’) which included a cargo of scrap metal being transported from France to Britain.

Since the Iron Age (500BC-322BC) goods such as wine, wool, salt, corn and even slaves have been imported from the Continent via the Dover Strait and wider English Channel to ports along the south coast of England and to London.

The UK has been given a lesson on the importance of the English Channel as a pinch point by Brexit. The reliance on the Dover Strait was underlined with new, post-transition customs procedures that have threatened to slow trade traffic between GB and the Continent.

However three months into the new arrangements, border controls on the UK side have been deferred to allow traders time to adjust to the new measures.

The new Silk Road

Of course, not all freight comes by sea. China’s $1trn Belt and Road initiative is described as a ‘new Silk Road’. Although the project does include investment in maritime routes to connect Asia, Africa and Europe, a ‘belt’ of overland corridors connects includes 71 countries that account for half the world’s population and a quarter of global GDP, reports the Guardian.

As well as investing in hard infrastructure, the project which has been endorsed by President Xi, brings China significant soft benefits in terms of influence in the many countries it passes through.

Air freight

Air cargo has faced problems of its own during the pandemic. With reduced space available in the bellies of passenger flights, there has been a capacity issue, according to Air Cargo news.

Figures from Accenture’s Seabury Consulting showed that global air cargo capacity in May was 28% lower than a year ago.

Some airports, such as Chongqing in China, have introduced new rules to prevent cargo arriving too early and causing logjams and cargo missing flights.

According to the Bureau of Transportation Statistics, reported in Transport Topics, US airlines have seen significant year-on-year increases in cargo levels during the summer, including a 12.5% surge in July.