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FACTS Post opinions with a wide range of perspectives to encourage constructive discussion.
For six days in a row, the world has focused on the blockade of the Suez Canal, with various experts calculating the damage. The prices of raw materials transported via the artificial waterway rose immediately. The shortage of goods also began to worry several companies, hence the warning of a further increase in the prices of a number of goods for end users.
“Since the canal was blocked twice in the middle of the 20th century, the overall effect was relatively small in the context of all world trade in those days. Now everything is much bigger, but there is not that much difference. This means that the effect is relatively small. ” This was stated in an interview with the program “Saturday 150” of the Australian economist John Quigin.
The first blockade of the canal was in 1956, and many experts believe that the Suez crisis at the time could have led to nuclear war. Although the geopolitical situation is quite different today, the busy sea lane remains a hot spot. The canal is currently controlled by Egypt, and losses from the six-day blockade of the huge “Ever Given” freighter to the country exceed $ 1 billion. To this day, there are British military bases there, recalls Miko Mered, a professor of geopolitics with a special interest in shipping, who teaches at various schools:
“In fact, the biggest challenge for seafarers and owners of shipping companies is to find alternative routes. And there are not so many. The options are to cross the Cape of Good Hope, one of the southernmost points in Africa, or to choose sailing north through the Arctic. These two possibilities are not as good as the Suez Canal. The Suez Canal is and will continue to be a top priority, but I am sure that in the coming days, weeks and months we will hear calls for dredging the Suez Canal. I also assume that we will hear voices from both the Arctic and Africa trying to persuade seafarers to use existing alternative shipping routes. “
Professor Hanjun Yang, who teaches transport economics at Beijing University of International Business and Economics, recalls that 12% of world trade passes through the Suez Canal:
“Which means an average of 3 million tons of cargo per day. The value is about $ 10 billion. The goods that pass through the Suez Canal are of all kinds: electronics, clothing, toys, as well as raw materials such as oil and natural gas. 10 percent of world trade in petroleum products passes through this channel. You know that when the lockdown on this key shipping lane began, the price of oil futures spiked immediately.
Plamen Natskov, Senior Sales Expert at Vessels Valor:
“The effect on supply chains should not be minimized. When ships cross the Suez Canal and arrive in Europe, there will be congestion at the discharge ports.”
He is convinced that shipping is still the best alternative, and incidents such as the blockade of the Suez Canal are so rare that they would not radically change the situation. From Beijing the analysis is different:
“There are rumors that other modes of transport may be more popular in world trade. For example, the railway line that connects China with Europe. In this way, goods can be transported from China to Eurasia and even reach Portugal. There are two main routes: one line passes through Russia to reach Europe. The other line passes through Central Asia, enters Turkey and from there branches into the Balkans and reaches the Czech Republic. Bulgaria is a major consumer of the rail line between China and Europe. In fact, there is a very serious interest on your part, and I think that the main advantage of this mode of transport is the shorter distance and therefore the faster delivery of the goods. The problem is that the price is double or even higher. “
Aviation is also an option, but it is many times more expensive, although much faster, the four analysts are inflexible. It is generally used for emergencies; for example, Covid-19 vaccines are only given by air.
What is the lesson we can learn from the situation in the Suez Canal?
“The lesson is that these problems can almost always be solved. The losses are not that significant, especially when compared to other phenomena, for example, the Covid-19 pandemic, which really seriously undermines the foundations of the world economy. Unfortunately, the dramatic photos people saw made them think, “This is a big ship blocking a great canal. That means the problem is big too, “said John Quigin from his home in Australia, who, although he considered the problem to be insignificant, said an important word on several occasions:” big. “In the immediate aftermath of the blockade, several sea captains They noted that in the last 10 to 15 years, cargo ships have become larger and technical means and crews remain unchanged, even people do not receive additional qualifications.
“Extreme natural events like the sandstorm that led to the Ever Given crisis are more likely to occur due to climate change. The Suez Canal remains a geopolitical hotspot.” This is a place where, medium or long term, it is possible that an armed conflict or some political tension will break out in Egypt that prevents normal traffic through the canal, “said Miko Mered. He hopes that the incident does not give an idea to terrorist organizations to attack the Suez Canal, but admits which is a serious risk.
The geopolitical situation in the region also does not rule out military conflicts or internal political problems in Egypt, which could lead to a new blockade, a risk that will be increasingly calculated in insurance premiums. And this, among many other factors, has its price, and the fees for crossing the Suez Canal are already higher.
Egypt
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