5 Questions You Never Knew You Had About the Suez Canal (And their Answers)
Fri, Mar. 31, 2017
1) Why are we even talking about the Suez Canal?
One word — trade. Consider: Maritime shipping is one of the cheapest and most-used means of modern transport, and the Suez Canal is the fastest crossing from the Atlantic and Mediterranean into the Indian Ocean and beyond — connecting Europe, North Africa, the Middle East and Asia. Eight percent of all global maritime shipping passes through the Suez Canal each year.That represents a lot of shipping containers, and a lot of goods funneling into international commerce.
2) Okay, but aren’t there other ways to ship goods across the world?
Absolutely — if you want to go overland across Asia or sail thousands of miles out of your way. Without the Suez Canal, vessels would have to travel an average of 6,000 extra miles around the southern tip of Africa — a distance almost three times the width of the continental U.S. Compare that to the 102-mile length of the Suez, and it’s no wonder the Canal is considered one of the world’s most important maritime assets.
3) If the Suez Canal really dates back to the time of the Pharaohs, how has it changed?
Planning for the modern Suez Canal began in 1854. But its origins trace back to 1850 B.C., when Pharaoh Senusret III is believed to have built an early canal connecting the Red Sea and the Nile River. Still, some of the Canal’s most dramatic upgrades are just a couple years old. In 2015, Egypt completed a $8.6 billion infrastructure improvement to:
a) Reduce waiting times
b) Shorten the transit time
c) Deepen the main canal to enable larger vessels to transit the waterway, and
d) Double the Canal’s daily capacity from 49 ships to 97 ships by 2023.
4) And what does Egypt get in return for all that investment?
About $5 billion a year. Forecast to hit $13.2 billion in revenues by 2023. Plus, the Canal employs countless of Egyptians and promotes economic development in the communities it passes. It’s a good investment, and not only for those who run it but also those who run through it.
More immediately, Egypt will benefit from a new self-sustaining industrial development corridor that will transform nearly 200 square miles and six strategically located maritime ports into an international commercial hub — the Suez Canal Economic Zone (SCZone).
5) So who else benefits from this modernized Suez Canal?
Actually, if you’re American, you do. Egypt lets the U.S. Navy skip the line to the Canal, providing a strategic military benefit to American forces deployed on time-sensitive operations in the Mediterranean Sea and Persian Gulf/Indian Ocean basin. Most years, that benefit translates into 35 to 45 U.S. Navy vessels taking a fast pass through the Canal. (Not to mention that U.S. military aircraft are also granted blanket overflight authority across Egypt.)
Then there’s the Suez Canal Axis Development project. Aiming to attract new U.S. and global investment, Egypt has created a strategically located, world-class logistics and manufacturing center at the crossroads of Europe, Asia, the Middle East, and Africa. Consider it an open invitation for U.S. and global companies to take advantage of Egypt’s regional trade blocs and agreements, while reaching millions of new consumers across four key world regions. Not a bad deal.
Download the fact sheet to learn more.