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The History of Suez Canal and Its Importance to International Trade Today

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In recent news, Israel has announced their plans to develop a railway line between the Mediterranean and Dead Sea. This strategic move hopes to capture some of the freight traffic enjoyed by the Suez Canal and hopes to compete with the well established maritime trade route. However, Egyptian government officials have stated that the railway poses no threat to the Suez Canal, as the rail route is expected to be two or three times more expensive than transporting goods via the canal. Furthermore, the Suez Canal has the capacity and experience to transport much larger volumes of goods at a time. For these reasons the railway is not expected to divert revenue from the Suez Canal. This article highlights the importance of the Suez Canal in the past and its relevance as a major trade route today.

The Nile River has always been a centre of importance to Egyptians, from a religious, political and economic perspective. Not only did goods travel the length of the river but information too. The Suez Canal, which connects both the Nile River and the Mediterranean Sea to the Red Sea, became an equally important trade route after its first opening on the 17th November 1869. The Universal Suez Ship Canal Company, largely owned by Egyptian and French interests, was formed and given the right to operate the canal for ninety nine years.

The Suez Canal had an immediate and significant impact on trade as it greatly reduced the time and the risk of transporting goods. In 1875 Britain bought out Egypt’s shares, although an international convention in 1888 ensured that ships from all nations were able to use the Suez Canal. However with the creation of Israel in 1954, Egypt prohibited the use of the canal for any ship travelling to and from the newly formed nation. In 1956 the Egyptian government seized and nationalized the canal so that it could act as port agents and charge passage fees. That same year, Israel invaded Egypt for political and religious reasons, and Britain and France soon followed on the grounds that the canal should be free for all nations to use. In retaliation, Egypt sank forty ships in the Suez Canal with the intention of blocking it. These series of events are known as the 1956 Suez Canal Crisis. A truce was arranged by the United Nations and the Suez Canal reopened in 1957.

The Suez Canal is currently operated by the Suez Canal Authority. It is still has its original length of 163 km and is 300 meters in width. However, there are future plans to make the Suez Canal wider and deeper, in order for it to support larger ships. The Canal is as important today as it was in the 19th and 20th Century. It is one of the world’s busiest waterways and supports 8% of all shipping traffic in the world, supporting freight shipping company services.

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Israel Railway Expansion Will Serve New Trade Route

After years of deliberation, Israel has finally decided to go ahead with plans to construct a railway line between the Mediterranean and the Red Sea. The new Israel railway link will serve as an alternative to the Suez Canal, which has a monopoly over the movement of traded goods in the region. Israel’s Prime Minister Benyamin Netanyahu has explained that the railway is a strategic move, even if it is projected to be more costly than freight and shipping. When the project was approved, the government explained that the country was relying on emerging economies like China and India to act as a bridge connecting Asia and Europe. The Israel railway will provide a link for them to do so. Jordan is also set to be involved in the project. The port of Aqaba, which is in close proximity to the Israeli port Eilat, is ideal for the sorting of freight containers.

The Prime Minister stated that Israel will enjoy the benefits of the railway for many years to come. This statement was in reference to the newly discovered natural gas fields in the Israel territory Mediterranean Sea. This natural resource could be of interest to Israel’s Asian partners. It also means that Israel and other nations will no longer have to rely on the Suez Canal sea freight service for the transportation of goods, as the popular sea freight link is often interrupted by political instability. Geographically, the new Israel railway is perfectly situated between Europe, Middle East and Asia.

According to plans, the Tel Aviv to Eilat stretch of 350km will only take about two hours, as modern passenger trains can travel at speeds of 300km per hour. The development of tourism is a secondary benefit. The government has not yet decided what contractors to use for the construction, although it has been reported that China might be awarded the contract due to their expertise in the field. The Israel railway will also serve to further foster the relationship between Israel and China.

The Most Important Canals for Sea Freight

When it comes to sea freight, there are many interesting aspects that contribute to the overall route of the trip. From the different ports of call, interesting shipping rules of the sea and of course the routes they take. There are a few key sea freight shipping canals that shape the world of freight and shipping as we know it; imagine a world where imports and exports took months longer than they currently do. Foreign aid, oil and other key industries would be hampered incredibly by ineffective slow turnover. Let’s look at the key sea freight transport canals that, in some cases, half shipping duration in half.

The Panama Canal completely cuts out an entire continent by connecting the Atlantic Ocean to the Pacific Ocean via the Caribbean Sea. Work began on the Panama Canal in 1880 and was completed thirty-four years later in 1914. This allowed sea freight containers the avoidance of the incredibly choppy and dangerous Strait of Magellan which claimed many ships over history. Ironically ownership of the Panama Canal has slipped from Columbia to France to American and only became Panama’s in 1999. In fact the majority of the economy of the country is generated by the sea freight cargo taxes that are generated by the Panama Canal. A world without the Panama Canal would exclude many economies in South America as well as make trips from the Atlantic to the Pacific dangerous.

The Suez Canal, also known as ‘The Highway to India’ is probably the most important contested canal route for sea freight in history. Opened in 1869 after a decade of construction, it linked the Mediterranean with the Indian Ocean artificially and sliced off months of travel time for sea freight. Time is said to be the biggest cost of sea freight in the UK since the major trade partners are usually on the other side of the world. The Suez Canal is interesting in its history which predates its own existence by centuries; records state that ancient Egyptians had planned a similar canal many centuries before it was eventually completed. Because of the vast importance of the canal, there is an international treaty stating that at no time, during war or peace, will usage of the canal be blocked no matter what country or organisation plans to use it.

There are many more key sea freight routes that exist, but these two canals are by far the most important that the world has in operation today. We’re sure that the future of these canals is secure because their importance is universal to sea freight regardless of nation.