Egypt’s Suez Canal has been at the heart of trade between Africa, Europe, and Asia since it opened in 1869. Marwan El Sammak, Chairman and CEO of Ship & Crew – Egypt, says, “It is a brilliant way to connect [Asia and Europe] using an all-water solution.”
However, that status is under increasing pressure as more countries, particularly in Asia, search for alternative routes. Further complicating the situation for the Suez Canal is that some routes are faster and cost less. They also can be less vulnerable to blockage and accommodate increasingly bigger vessels.
“The blocking of the Suez Canal [for six days] by the 400-meter Ever Given super ship [in 2021] accelerated … concerns about over-dependence on the canal, [which] have been around for a long time.” James Brown, associate professor at Temple University in Japan, told Al Jazeera in May 2021.
Biggest threat
The Arctic route connecting Asia and Europe is quickly becoming a viable option. Research published in The Suez Canal: Past Lessons and Future Challenges, the January 2023 volume of the book series Palgrave Studies in Maritime Politics and Security, found global warming is breaking up the Arctic ice pack, making it possible for some large freighters to use the Northern Sea Route that runs along Russia’s Arctic coastline to Norway. Ships leaving from east and southeast Asia could also use it, as the route is in international waters and requires no paperwork or tolls. And it is less vulnerable to closures due to geopolitical developments or accidents.
The Northern Sea Route is ready to accommodate large ships and could prove faster than the Suez Canal. “This is the maritime route that is likely to be free of ice first and thus represents the highest commercial potential,” said Canada-based nonprofit Transport Geography. “It would reduce a maritime journey between East Asia and Western Europe from 21,000 kilometers using the Suez Canal to 12,800 kilometers, cutting transit time by 10 to 15 days.”
According to Eddy Bekkers, an economist at the World Trade Organization, Europe and Asia increasingly prefer the Northern Sea Route. In a paper published in 2018 by the London School of Economics and Political Sciences, Bekkers predicted there would be “remarkable shifts in trade flows between Asia and Europe, diversion of trade within Europe, heavy shipping traffic in the Arctic and a substantial drop in Suez traffic.”
Russia, China, Japan, and South Korea would be the biggest beneficiaries of promoting the Arctic route. According to Emre Abay, a journalist at Russia-based Anadolu Agency, “The Northern Sea Route is essential [for Russia], not only economically but also militarily and strategically.” The benefits for China and South Korea are almost all about “searching for faster ways to reach the European market. Russia and China seem to have found what they were looking for in the Northern Sea Route and will continue to work this path.”
Maritime experts told Abay, “The Northern Sea Route will be ready to be used at full capacity by 2030,”
India’s alternative
Another trade route on the rise is the International North-South Transport Corridor (INSTC), backed by India. Deepankar Sinha, a professor at the Indian Institute of Foreign Trade, said in a June 2021 EuroAsia op-ed that the importance of that path increased significantly after the Ever Given incident in the Suez Canal.
The route is a 7,200-kilometer mix of land, maritime, and lake freight connecting India to Russia. The first leg runs by rail from Mumbai to Bandar Abbas in Iran. Goods are then transferred to trains bound for Baku, the capital of Azerbaijan, then shipped on the Caspian Sea to Astrakhan in Azerbaijan. Cargo then takes a rail route, stopping in Moscow and ending in St. Petersburg. The corresponding Suez Canal route goes from Mumbai and travels non-stop to St. Petersburg via the Red Sea, the Mediterranean Sea, and Europe’s entire western coastline. At 14,756 kilometers, it is twice as long as the INSTC.
Research from the Federation of Freight Forwarders Associations in India said the INSTC is “30% cheaper and 40% shorter than the current traditional route.” The federation said, “77 countries … are part of the INSTC project … from Europe, Africa and Asia.” Regulating their relationships is the Transports Internationaux Routiers (International Road Transport, or TIR) framework, a global system of customs controls.
The INSTC also has a geopolitical dimension. “The INSTC has particular economic and strategic relevance to India given the increasing regional ambitions of China through its One Belt, One Road Initiative,” Bipul Chatterjee of CUTS International, an India-based think tank, wrote in The Diplomat in 2015. “The proposed INSTC trade corridor could help India secure its interests in Central Asia and beyond.”
Emerging routes
Other countries are investigating the feasibility of new trade routes to reduce dependence on the Suez Canal. In 2020, Israeli media reported on plans to dig an artificial 250-kilometer canal (Ben-Gurion Canal) and oil pipeline inside the country to connect its Eilat port on the Red Sea to its Ashkelon port on the Mediterranean coast for international shipments.
In 2021, after the Ever Given blocked the Suez Canal, regional media reported on the potential of extending an oil pipeline between the UAE and Israel to bypass Egypt’s waterway. Zvi Bar’el, Middle Eastern affairs analyst at Haaretz Newspaper, wrote in a January 2022 piece, “The bigger problem [for Egypt] could be Saudi Arabia using the pipeline, too, if the kingdom normalizes relations with Israel.”
The Israeli government also is talking up a railroad through Jordan to the UAE. Bar’el noted that would only happen if Saudi Arabia agreed since the tracks would traverse its territory.
In 2021, the UAE started using a road route connecting the emirate of Sharjah with Bandar Abbas in Iran (which also connects with the INSTC) and Iskenderun in Turkey to move cargo to Europe. The route takes less time than the Suez Canal, needing seven days instead of 21 to reach its destination. Also that year, TRT World, a Turkey-based news wire, reported Pakistan was interested in the UAE’s land route, as it would take 10 to 12 days for Pakistani exports to reach Europe. Those countries use the TIR framework to facilitate the movement of goods.
On the ground, the main risk facing the Suez Canal is it will become just one of a rising number of options for moving cargo between Asia and Europe.” While an estimated 12% of the world’s maritime trade passes through the Suez Canal, and although this proportion cannot be ignored,” Abay stressed, “the route is not indispensable.”
However, El Sammak points out that the Suez Canal has no locks and could still be made deeper and wider. Noting that maritime transport is still the most competitive way to move large cargo volumes with a limited carbon footprint, he stresses, “Competing with the Canal is extremely difficult.”
