The Economist explains
APOLOGIES DO NOT come much bigger. This week Shoei Kisen Kaisha, a Japanese firm, issued a grovelling press release after its ship, the Ever Given, became wedged in the Suez Canal. High winds supposedly blew it off course on Tuesday, preventing other ships from passing through the seaway. The Ever Given’s stubborn refusal to refloat has launched a thousand memes, but the economic damage is no joke. The canal carries 12% of global trade by volume, and an alternative route between Asia and Europe, around the Cape of Good Hope, adds more than a week to a ship’s journey. The Suez Canal is one of many narrow choke-points on which maritime trade relies. Others include the Panama Canal, which links the Atlantic and Pacific Oceans, and the Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman. Even without a ship as long as the Empire State Building is tall stopping traffic, these choke-points are under more pressure than ever.
One reason is that, until the covid-19 pandemic, the volume of maritime trade was growing. In 2010, 8.4bn tonnes of cargo travelled by sea. By 2019, this had grown to 11.1bn tonnes. And as trade volumes have grown, so has the importance of choke-points for crucial goods such as food and fuel. In 2000, 42% of global grain exports passed through at least one maritime choke-point, according to Chatham House, a think-tank. By 2015, that had risen to 55%.
In response, some choke-points have expanded their capacity. In 2015 an $8bn expansion project added 35km (22 miles) of new channels to the Suez Canal and dredged existing ones, allowing bigger ships to pass through. A year later an expansion of the Panama Canal was completed, making it big enough for 79% of cargo-carrying ships to pass through, versus just 45% before. An easier solution might be to bypass choke-points altogether. For goods such as oil, pipelines offer an alternative. The SUMED pipeline, for example, carries oil between the Red Sea and the Mediterranean. But not all goods can be carried overland so easily. Russia is keen to push a northern sea route, through the thawing Arctic sea ice, as an alternative passage between Asia and Europe. But a navigation season of three to four months each year and unpredictable ice conditions make it unfeasible still.
Political instability and conflict provide more reasons to find a way around choke-points. In 2019 Houthi rebels, fighting a Saudi-led coalition in Yemen’s civil war, seized a Saudi boat in the Red Sea that was towing a South Korean oil-drilling rig. Yemen’s coast is on the narrow Bab al-Mandeb Strait, through which tankers transport around 10% of the world’s petroleum shipped by sea. Somali pirates also target these waters. In recent years around half of piracy incidents have occurred off the coasts of Somalia or Indonesia, where ships pass through the Strait of Malacca, which at its narrowest is just 2.7km across.
And although climate change may one day make a route through the Arctic practical, it threatens choke-points in other ways. Extreme weather events will become more common. In 2016, a long dry spell in Central America forced the introduction of depth restrictions on the Panama Canal that prevented some larger ships from travelling through it. And rising sea-levels threaten the viability of ports.
Few people would have expected a single vessel to cripple one of the world’s most vital trade routes for this long, but the Ever Given is a giant reminder of the fragility of supply chains. It may take days or even weeks to free, at which point the Suez Canal will resume normal service, carrying almost 19,000 ships a year. But future disruption to maritime trade routes could take more than just cranes, diggers and tug boats to fix. Governments and companies need to plan for more rough crossings.