Suez Canal & World Economy
                     Suez Canal & World 
Economy
Introduction
The Suez canal is a significant route for energy, 
commodities, consumer goods and componentry from Asia 
and the Middle East to Europe. The canal’s location also 
makes it a key regional hub for shipping oil and other 
hydrocarbons.
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Suez Canal
Officially opened in November 1869, the Suez Canal in 
Egypt, connects the Mediterranean Sea to the Red Sea. 
One of the world’s most heavily used shipping lanes, the 
Suez Canal provides the shortest maritime route between 
Europe and the lands lying around the Indian and western 
Pacific oceans. 
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Transportation
The recent grounding of the Ever Given container vessel 
has underscored the importance of the Suez canal for 
global freight and supply lines.
Approximately 12% of global trade and 30% of global 
container traffic traverse the Suez, transporting over USD 
$1 trillion worth of goods per annum.
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Panama Canal
On average, 50 ships traverse the canal daily carrying 
between USD $3-9 billion worth of cargo. Over one billion 
tonnes of cargo was shipped through the canal in 2019, 
four times the tonnage transiting the Panama canal during 
the same period.
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Busiest Trade 
The Suez is one of the most important and busiest trade 
arteries in the world, indicating that the Middle East and 
Africa region, and Egypt in particular, are a strategic nexus 
for New Zealand global trade.
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Supply Chain
As supply chains and global trade have increased in 
quantity and complexity, maritime vessels have grown to 
meet demand. 
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Income for Egypt
The Suez waterway is operated by the Egyptian state-
owned SCA and provides a significant income for Egypt. 
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The cost
 Analysts suggest Europe has experienced the strongest 
impact of the stranding. 
However, companies in Asia will not only be impacted by 
the delay of shipments from Europe, but also by a shortage 
of empty containers returning to the region. 
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Issues
At present there are no suitable alternatives to the Suez 
canal, except the long trip around the southern tip of 
Africa. Transiting the Cape of Good Hope route requires an 
additional 9,000km or 6-14 days travel time, depending on 
the vessel and cargo. The usual transit time of the Suez 
end-to-end is about 13-15 hours.
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Conclusion
The Suez canal is a critical maritime passage for global 
supply chains and among the world’s most significant 
trade chokepoints, alongside the Strait of Hormuz, the 
Malacca Strait and the Panama canal. 
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