VULNERABLE CANAL

The Suez Canal obstruction incurred tens of billions of dollars in damage for the global trade, as it was impossible to navigate through the facility for a week. The 400-m long container ship Ever Given with a displacement of 220,000 tons en-route from China to the Netherlands grounded on March 23 in the southern part of the canal. It blocked the canal for almost 450 ships, including tankers, gas and container ships. Only on March 29 it was possible to re-float the ship by moving it from the narrow part of the canal to the Great Bitter Lake.

According to experts, it will take weeks, and possibly months, to completely eliminate the disruptions in the traffic schedule, which has already significantly influenced the delivery time of goods. As a result, international logistics companies are challenged to diversify their supply chains and routes to optimize risks.

Who is the culprit?: wind, captain or Putin?

As soon as the news about the incident in the Suez Canal, which ensures almost 12% of the global trade flows, hit the Internet, many memes and speculations appeared online too. Since the implications of the incident were as large as, for example, the coronavirus pandemic, many users of social networks came to the conclusion that the incident with Ever Given was not accidental at all, and that someone was interested in blocking the canal, which guarantees the fastest maritime communication between Asia and Europe. Among the possible beneficiaries of the downtime were named the representatives of the notorious ‘world government’. They also mentioned even the Russian President Vladimir Putin, who had the largest number of funny memes associated with his name.

Conspiracy theories were fuelled when it was reported that before entering the canal, Ever Given has allegedly made an intricate manoeuvrer recorded by the VesselFinder service. However, everything, as expected, was fairly simple. Spokesman for the shipping company Bernhard Schulte Shipmanagement, which operates Ever Given, told the German magazine Der Spiegel that it is usual for the ships awaiting entry to the canal ‘to wander’.

As for the incident, according to the main version, the container ship accidentally deviated from the course due to strong winds. Indeed, the velocity of strong gusting wind reached 46 miles per hour on that day, causing a sandstorm. Hence the team lost control and turned towards the sand embankment.

Remarkably, the head of the Suez Canal Administration, Osama Rabia, said that the canal was not involved in the accident and was considered the affected party, although it is the management company’s responsibility to ensure that there are no shoals off the coast. “Do not forget that the captain is the first person in charge and the one who manages the ship,” Rabia said, thus indirectly hinting at the main culprit.

Either way, there is clearly something to analyse and draw conclusions. Indeed, the ‘new Suez crisis’, same as the COVID-19 pandemic, showed us the downside of the globalization. Initially, it was a virus that originated in China and spread across the world. This time it was a congestion in the narrow part of the Egyptian strait that affected trade and production in many parts of the world. However, the humanity apparently is getting used to the fact that an advantage can turn into a disadvantage at any moment. Maybe that's good news.

Important and vulnerable sea routes

Canals and straits have always been considered important military-strategic and commercial facilities. However, these routes very often have many vulnerabilities. For example, same as the Suez Canal, the strategic Bab-el-Mandeb Strait, which separates Africa from the south of the Arabian Peninsula, is under constant threat due to the conflict in Yemen. There are fears about the suspension of oil supplies through the Strait of Hormuz every time the situation around Iran intensifies. Tehran has repeatedly threatened to block the strait too. Another significant route for the global trade, the Straits of Malacca, which connects the Indian and Pacific oceans, constantly faces the threat of piracy.

In recent years, problems associated with the climate change have added to the threats of armed conflicts, piracy and terrorist attacks. If, for example, sandstorms become frequent in the Suez Canal, there is a risk of incidents similar to the one with Ever Given. Navigation in the Strait of Malacca is often hampered by smoke from the annual forest fires on the island of Sumatra. Due to forest fires, it is sometimes necessary to block the Dardanelles, which is quite dangerous due to narrow passages, frequent fogs and storms.

One of the busiest canals in the world, the Panama Canal, also suffers due to climatic conditions such as heavy rainfalls. Meanwhile, there are plenty of alternative routes in addition to the Suez Canal, although they all have their own economic and geopolitical costs.

One Belt, One Road

Routes within the very large-scale and ambitious Chinese project One Belt, One Road (also known as the economic belt of the Silk Road and the maritime Silk Road of the 21st century) are called among the main ‘bypass roads’. This project aims to create new and improve existing land and sea transportation and economic corridors between Beijing and the countries of Central Asia, Europe and Africa. Not only may they guarantee greater safety of goods, but also significantly reduce the delivery times. Main directions from China are through Central Asia, Russia to Europe (to the Baltic Sea); through Central Asia and Western Asia to the Persian Gulf and the Mediterranean Sea; across Southeast Asia and South Asia to the Indian Ocean. In addition, there is a direction through the South China Sea to the Indian Ocean and further to Europe, as well as through the South China Sea to the southern Pacific Ocean. China is taking the initiative very seriously. Thus, two new financial institutions have been created - the Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund. Thus, the developers carry out meticulous work, involving economic, technical and diplomatic works.

Northern Sea Route

Another route, which has been widely discussed lately, is the Northern Sea Route (NSR). Due to global warming, the ice cover of the route gradually decreases every year. NSR is significantly shorter than the routes linking Europe and Asia via the Suez Canal, which will help transport companies save time and transport costs. On the other hand, it is assumed that icebreakers escorting cargo significantly increase the cost of transit and reduce the speed of movement, hence ‘compensating’ for the obvious distance advantage.

Nevertheless, Russia is already building the first of a batch of new icebreakers, which will ensure year-round navigation in the Arctic. The ship is expected to be launched by 2027. It will be 209 m long with a maximum speed of 22 knots. The icebreaker will be able to crush more than 4m-thick ice layers to lay a 50m-wide canals on the water surface. According to Alexander Krutikov, Russian Deputy Minister for the Development of Far East and Arctic, by 2035 the expected volume of traffic along NSR will be 160 million tons.

Moscow considers developments in this area strategically significant, including with the use of the military component. That’s how Russia demonstrates its dominance in the region. Remarkably, in parallel with the Suez Canal incident, the Main Command of the Russian Navy conducted the Arctic expedition Umka-2021 near Franz Josef Land, the northernmost archipelago of Russia separated from the continent by the Arctic Ocean. The navy practised various combat training, research and practical tasks, including the simultaneous emergence of three nuclear submarines from under the ice in a limited area with a radius of 300 m. The operation was successful, and the Ministry of Defense posted a video of the surfacing on the Internet, which instantly gained great popularity. By the way, among the countries especially interested in the Northern Sea Route are South Korea, Japan and China. Moreover, the latter may also use the NSR as a bypass route along the New Silk Road.

Red-Med, Lapis Lazuli and North-South corridors

Another land-based alternative to the Suez Canal, which has long been discussed, is located very close to it. This is Israel's Red-Med high-speed rail corridor, which will connect the port of Eilat in the Gulf of Aqaba on the Red Sea to the ports of Ashdod and Haifa on the Mediterranean coast. This route, due to the unloading / loading of the transported goods, is undoubtedly more expensive than passing through the Egyptian canal but it still popular among the large exporters like India and China. In addition, Saudi Arabia is showing interest in the project, which seems in line with the ongoing normalization of Israeli-Saudi relations. By the way, Neom is a futuristic metropolis that Riyadh is building in the desert near the Red Sea, very close to Eilat.

It is also necessary to mention the Lapis Lazuli Corridor to connect Afghanistan with Europe through the Caspian Sea, the Caucasus and Turkey. The North-South Corridor (NS) is a project of an international transport corridor, which is supposed to provide transport links between the Baltic countries and India through Iran. The main advantages of the corridor are shorter transportation distances and thus lower costs.

Remarkably, Azerbaijan takes an active part in both projects, as well as the projects under the Belt and Road Initiative. It becomes one of the hubs of the land-based supply chains converging from different directions. The results of the Second Garabagh War also contribute to the involvement of Baku in these projects. After all, Azerbaijan has returned under its control the territories occupied by Armenia and is now engaged in the revival of these lands, attracting investments. Most importantly, Baku is consistently and directly supports unblocking all regional communications. Since ancient times the busy trade routes brought prosperity and stability and helped maintain peace. The same laws work in the modern world. Thus, the incident in the Suez Canal will inevitably push the implementation of alternative routes to minimize all possible risks, with a large number of stakeholders most likely guaranteeing the success of the ongoing process.