Egypt and the Suez Canal Authority have suffered economic damage and embarrassment from the 400-meters-long Ever Given bottleneck incident. Yet, the International Maritime Organization has not taken any measures to mitigate the effects that ever larger cargo ships are creating for the world’s main waterways. Gigantism, the phenomenon of Far Eastern shipyards bursting with orders for ever bigger container ships, shows no signs of halting despite the pandemic. Ships with far greater capacities than the Ever Given are being assembled.
No state would dare to act alone to stop this trend; for example, by placing limits on access to its ports. Egypt and the Canal Authority – which have suffered very significant damage during the ordeal – have confiscated the Ever Given, demanding a billion-dollar compensation from its owner Evergreen. But international institutions have done little to constrain the market, or rather, those who control it. Perhaps, there will be renewed calls to impose size limits on ships. Yet, the most likely effect will be to encourage a comprehensive upgrade of the Suez Canal.
The Suez Canal is the foundation of world trade. Though the foundation is eroding, and the incident involving the Ever Given container ship in March has demonstrated the fragility of global trade flows. Ship traffic on the important waterway that links the Red Sea to the Mediterranean has slowly started to move again. Accumulated delays notwithstanding, the Ever Given episode has exposed the Canal’s inability to cope with naval gigantism.
The Ever Given episode has exposed the Canal’s inability to cope with naval gigantism.
The Canal is one of the maritime communications routes of greatest international strategic and commercial importance. For over a century, it has allowed vessels to travel from Europe to Asia and vice versa without the need to circumnavigate Africa along the Cape of Good Hope route—an inconveniently expensive option, which adds seven more days of navigation for cargo ships and 14 days in the case of oil tankers.
Some 12 percent of world trade (and about 7 percent of oil) reaches its destinations through the Suez Canal. And Egypt is generating ever greater revenues from tariffs, which in 2020 (despite the coronavirus induced discounts) were the third highest in the history of the Canal. It might be said that the pandemic has exposed the weaknesses of ever greater inter-dependence and the importance of resilient supply chains. Therefore, rather than encouraging alternatives to the Suez Canal, images of the stranded Ever Given on social media, stuck between Africa and Asia, only served to demonstrate that geography trumps all else. This is true even in the era of artificial intelligence when it comes to trade and logistics.
The Suez Canal Company
The French Compagnie Universelle du Canal Maritime de Suez built the Canal in a period of ten years, between 1859 to1869, near traces of waterways that date back to ancient Egypt. The canal consists of two sections. The northern one runs from Port Said to the great Bitter Lake south of Ismailia, and the second runs from the Lake to Suez. The canal measured 164 km (102 miles) in length and 53 meters (174 ft) in width when it was inaugurated. It is 8 meters (26.2 ft) deep and allows for ships with up to 6.7 meters (22 ft) of maximum draft (the vertical distance between the waterline and the bottom of the hull).
At the end of 2010, following enlargement works, the Canal was lengthened to 193.3 km (120 miles), the width increased to 205-225 meters (673-738 ft), and the depth increased to 24 meters (79 ft), to allow the transit of vessels with a draft of up to 20.12 meters (66 ft). Now, consider that the Ever Given is just a few millimeters shy of 400 meters (1,312 ft) in length and about 59 meters (194 ft) wide with a draft of between 14.5 to 16 meters (48-52.5 ft), and it’s clear that the latest generation of cargo ships – which have increased by some ten percent in all critical dimensions – demands another expansion of the Suez Canal.
Already in 2014, Egyptian President Abdel Fattah al-Sisi ordered a renovation to widen sections of the Canal while also strengthening linked road and railway arteries. The project also included the expansion and construction of five commercial ports in the Port Said area. In a globalized world, like the current one, sea traffic is king and the related development of the Suez Economic Zone has allowed Egypt to remain competitive against the main European and Middle Eastern logistics regions such as Hamburg, Rotterdam, and Jebel Ali in the United Arab Emirates.
Egypt is aware that it must maintain a high standard of service lest maritime traffic be diverted to other routes. After all, the cost of circumnavigating the African coast is similar to that of using the Suez Canal in the case of large ships bound for northern Europe. The Ever Given incident has exposed the weaknesses of the Canal, forcing Egypt to consider launching another project to renovate it.
China, which has been developing its Belt and Road Initiative to facilitate land-based trade between Asia and Europe – in what is a veritable revival of the Silk Road of yore – has for some time set its sights on the Suez Canal.
China, which has been developing its Belt and Road Initiative to facilitate land-based trade between Asia and Europe, has set its sights on the Suez Canal.
Clearly, Beijing understands that to ensure more control over maritime traffic, and especially fundamental routes and traffic choke points, narrow or artificial channels such as the Panama Canal, the Strait of Malacca, the Strait of Hormuz, and the Suez Canal are all important. But the Suez Canal might possess the greatest strategic value. In as early as 1888, the first article of the Constantinople Convention of that year established that the Canal “will always be free and open, in times of war as in times of peace, to every merchant or warship, distinction of flag.”
Presently, control over the Suez Canal has become even more important, considering the pace of militarization in the Red Sea. Russia, which is trying to regain influence in the Mediterranean with a naval base in Latakiya (Syria) and potentially another in Cyrenaica (Libya), has reached an agreement with Khartoum to build one in Sudan.
Meanwhile, Israel has made it no secret that, in view of a potential confrontation with Iran – the possibility of which is becoming ever more a probability – it needs to maintain a degree of control of strategic sea routes. And, of course, Washington, which controls the world’s mightiest navy, also wants to keep a close watch over the Suez Canal. Yet, it’s China, which can use the Ever Given incident to stake a dominant claim over the Suez Canal.
China has a powerful incentive to fulfil any efforts to design, execute, and pay for the infrastructure to improve the navigability of the ever-larger ships traveling from Asia to Europe. The new Silk Road’s success is meant to complement, rather than challenge, naval traffic. This suggests that Beijing could turn Egypt into a privileged logistics hub, from where it could literally control maritime traffic in the entire European region. Therefore, if a mere gust of wind was enough to block a cargo ship and bring global trade to a halt, the Chinese have every incentive to ensure this doesn’t happen again.
To Washington’s annoyance, Beijing and Cairo have found in a gust of wind and a gigantic cargo ship the excuse to deepen their relationship. China is poised to write a new chapter in the development of the Suez Canal, which was inaugurated on November 17, 1869. Beijing was already the main investor in the mega-restructuring project launched in 2014 with the goal of increasing the role of the Suez Canal region in international trade. Meanwhile, Chinese companies have also started to operate in the Suez Canal Economic Zone (the SCZone), which could become a hub for Chinese heavy industry, including steel giant TEDA.
The Historical Irony
It’s beyond the scope of this article to speculate on how the United States and its allies might react to China’s grand design. Yet there is room to consider the historical irony, given that the Suez Canal served to consolidate French and British 19th century imperialism in Africa and Asia.
There is room to consider the historical irony, given that the Suez Canal served to consolidate French and British 19th century imperialism in Africa and Asia.
The Suez Canal did not begin as an Egyptian affair. At the time of its opening, even Karl Marx observed that the channel represented decades of submission to the colonial powers. While there’s little to question in the desirability of a canal linking the Red and Mediterranean seas – the archaeological evidence suggests that even the pharaohs wanted one, as did the Republic of Venice in the 16th century – Egypt, which funded some 44 percent of the project (investing in the Suez Canal Company), ended up going bankrupt in 1875.
Egypt’s ruler, the Khedive, was forced to sell its shares in the Company to the United Kingdom, by then the waterway’s most prolific user. Thus, the Suez Canal Company fell to exclusive Anglo-French control. The British used their ownership of the Company to sneak their way quite literally into administering Cairo’s finances. Through occupying it militarily, Britain also established a foothold from where to project its designs in the Middle East, as anyone who has ever watched the great film “Lawrence of Arabia” can attest.
It was the Suez Canal that made the economic exploitation of the colonies advantageous, allowing Great Britain to run the largest ever maritime trading empire, linking its ports with Gibraltar, Alexandria, Bombay, Hong Kong Bay, and Cape Town. That is, until July 26 of 1956 when President Gamal Abdel-Nasser nationalized the channel. The move triggered a British-led military intervention, which US President Eisenhower stopped – effectively marking the collapse of Europe’s empires.
In a sense, the Suez Canal has been both a burden and advantage for Egypt, starting out as a monument to its submission to foreign interests and then becoming a key source of revenue after 1956.
Indeed, some future historians might one day interpret the 2021 Ever Given incident as another watershed moment and as the catalyst for an acceleration of China’s economic momentum and global trade dominance. Hopefully, these historians might have the opportunity to identify some benefits for Egypt as well.