The opening of the New Suez Canal represents a real achievement for Egyptian President Abdel-Fattah El-Sisi. The 193-kilometer long waterway took only one year to refurbish and is the biggest expansion of the original Suez Canal that first opened in 1869. It is important to note that the second canal, which is actually a new 35-kilometer channel with 37 kilometers of widening and deepening of the original, allows two-way traffic and reduces transit time to 11 hours from 18 hours. But let’s be clear, the New Suez Canal is an important revamp of the original Suez Canal, hence this notable feat creates a Suez Canal System.
Importantly, Egyptian authorities argue that the expansion will meet future demand, with traffic expected to double to 97 vessels a day by 2023. This growth must be understood in terms of maritime trade to and from Europe, the Middle East, and the Indian Ocean. Consequently there are strategic considerations that need to be understood clearly of why now and what the future holds.
The Suez Canal System is considered to be the shortest link between the east and the west due to its unique geographic location; it is an important international navigation canal linking between the Mediterranean Sea at Port Said and the Red Sea at Suez. The geospatial position of the Suez Canal makes it of special importance to the world and to Egypt as well. This importance is being augmented with the evolution of maritime transport and world trade through supply chain economics. Maritime transport is the cheapest means of transport, where more than 80 percent of the world trade volume is transported via waterways and seaborne trade. Although supertankers cannot transport the strategic waterway, there is still plenty of other seaborne craft that use the Suez Canal.
Primarily, the New Suez Canal helps to boost the strategic throughput of the Suez Canal System through the concept of Egypt being an enhanced Middle East/North African trade hub between Europe and Asia. The journey from the Arabian Gulf to Northern Europe is particularly impacted by the Suez Canal as a 21,000 km journey around Africa taking 24 days is reduced to a 12,000 km journey taking 14 days. Thus, the trade link is absolutely critical for the Egyptian economy but also for the shipping companies and insurers who seek timely delivery of stocks and goods at lower prices. Updating the Suez Canal System helps everyone from the Egyptian economy with its trickle down effects of job creation and housing plus the international shipping system and its supply chain networks who are always looking for cost-cutting measures for maximum profit.
Future seaborne trade
Europe is a beneficiary too with the new canal system. For Europe, the Suez Canal is a vital waterway for oil and trade with Asia. This is not to say that it is without alternative, since the less traveled Cape of Good Hope could be used, but failure to update the Suez system would have several consequences to the future seaborne trade. Europe, too is concerned by the events in North Africa and Egypt, and the support given by France, Italy and Russia to Egypt only enhances the strategic element of the canal system that links West with East. Thus, Egypt’s stability comes first and foremost with the New Suez Canal as an economic lifeline.
From the maritime strategic viewpoint, the Suez system remains a perennial asset. Navies still need to transit the Suez system and protect it with all their might. From the Mediterranean Sea to the Red Sea, maritime threats and contingencies continue to grow. Somali piracy is now being replaced by the African migrant crisis from Libya to the Arab-led war in Yemen.
Threats to the Suez Canal System remains. Recent attacks on Egyptian security forces and installations in Sinai by ISIS is a worry. With a width of only about 900 feet, extremists might be able to disrupt the canal’s operation by attacking large ships in its restricted space. As such, the Egyptian armed forces are devoting significant resources to ensure safe transit. Egypt’s army, navy, air force, air defense forces, and internal security services are enhancing security measures in and around the Suez system and its related facilities to halt the possibility of an attack. Other countries from the GCC are helping with this security effort.
Perhaps the biggest story regarding the new Suez Canal System is the Joint Comprehensive Plan of Action (JCPOA) nuclear agreement with the Islamic Republic of Iran. The deal is an economic boom for the Suez system. With the Iran deal, and the opening of the Islamic Republic to the international market, Tehran will be sending Iranian goods and services by ship and receiving European materials. Iran’s requirements are massive. The volume of this trade will only increase over time and the ability to transport those assets via ship through the Suez will be part of the larger throughput to Europe.
However, there will still be concern for years of Iranian ships passing through the Suez system that may be concealing contraband materials particularly geared towards the Yemen issue and, of course, arms for Israel’s enemies. There is no doubt that these Iranian ships needs to be monitored for the foreseeable future. Then again, there are many other flagged ships from various countries that fall under this category.
Overall, from a geopolitical and geospatial point of view, the New Suez Canal boosts Egypt as a focal point for growing seaborne trade. Maritime trade and security are only going to grow and the importance of the New Suez Canal to the widening port system in the Indian Ocean region provides hubs and maritime links that will usher in a new era of greater importance for this short, but extremely strategic waterway.