As a company specialising in sea freight as one of our services, Here at Radius we are always extremely interested to learn more about the world’s shipping routes. One of the most famous canals that will spring to the minds of many is the Suez. With an average of 50 large vessels passing through the Suez daily, it is clear that the canal is a major facilitator of world trade.
With sea freight being one of the top logistics trends to watch in 2024, we wanted to shed some light on the significance of the Suez Canal by looking at what percentage of world trade goes through this shipping route. Whether you want to understand more about navigating international shipments or are just fascinated by this world-famous waterway, we think you will find this an interesting read.
Keep reading to learn more and to understand how we can facilitate sea freight shipping for your business.
History of the Suez Canal
Before we jump into the statistics, let’s start by looking at what the Suez Canal is in terms of its history. The Suez Canal runs from Isthmus of Suez in Egypt to connect the Mediterranean and Red seas. Designed to reduce shipping time, the canal is also a huge part of the Egyptian economy, which has been the case for hundreds of years. The canal is 120 miles long and has no locks, thus allowing ships to navigate through it without the need for raising or lowering their level. This was a goal of the earliest phase of the shipping route as the intention has always been to facilitate larger amounts of trade.
Originally property of the Egyptian government, the Suez includes international stakeholders, which is one of the reasons that it is used for worldwide trade. The canal as we know it today opened in 2016 when a new side was extended, allowing for more container terminal activity. Although the shipping requirements of the canal are different in the modern day, the benefits of saving time and improving efficiency remain. For this reason, the Suez Canal will likely remain an important element of world trade for future generations.
How Much World Trade Goes Through the Suez Canal?
We have established that the Suez Canal is a busy shipping route, but that point is further enhanced when we dive into the numbers. It’s estimated that a staggering 12% of global trade travels through the Suez Canal every year! Furthermore, 30% of all global shipping container traffic uses the stretch of water, which is a huge amount when you consider what that means in terms of a global view.
When broken down into types of activity, it’s also interesting to see how the Suez assists different sectors. For example, 7-10% of the world’s oil supply is transferred via the stretch of water, which is a significant amount. As you can imagine, this high amount of global shopping means big money for the Suez Canal Authority, which saw revenues reach more than $9 billion in 2023. With global markets starting to pull back after a few years of economic and global uncertainty, we predict that the percentage of international trade using the route will likely continue to increase over the coming decades.
Why Does Such a Higher Percentage of the World Trade Pass through the Suez Canal?
Faster Journeys
For companies looking to expedite deliveries from the world of fashion and other sectors to make quick returns on investment, shipping times are essential to get right. The Suez Canal allows 7 – 10 days of time to be saved as the journey is reduced by 12,000 km.
Furthermore, the shipping route is intended for increased traffic meaning that there are less likely to hold-ups or delays. With the waterway being intended for global trade, logistics firms are less likely to run into administrative or regulation issues that travelling across alternative passengers of water can create. As the Suez Canal is a well-maintained waterway, it makes it an attractive option for shipping companies that want to transport large volumes of cargo quickly and efficiently.
Elevated Efficiency and Cost Savings
Another reason that the Suez Canal facilitates such a high amount of global trade is because it offers a cost-effective and environmentally friendly solution.
Cost-wise, companies can receive their products faster and spend less as fewer shipments can be chosen for delivering the same, if not more, items. Larger shipping containers have more capacity than other freight carriers, hence the efficiency benefits for businesses. Sea freights also have less of an impact on the environment as fewer journeys can be made. Also, the vehicles themselves are slightly more sustainably friendly. This means that some additional taxes accrued due to other shipping forms that are not as good for the environment do not apply to sea logistics. Another bonus of this is that companies will have less of a carbon footprint by proxy, which, for many, goes towards creating a robust and customer-impression set of CSR values.
Both of these benefits showcase how you can make sea freight services work for you, as factors such as time and budget don’t have to be thrown out of the window just to receive items when they are required.
Direct Link From Asia to Europe
Another reason for trade being so popular along this route is that Asia is the biggest player when it comes to manufacturing. The canal provides a direct shipping route between Europe and Asia, eliminating the need for ships to travel around the southern tip of Africa. This means quicker fulfilments and less complex logistical challenges and planning. Additionally, the chance of privacy is reduced which is common off of the coast of Africa with large ships often being the main target.
With many companies in the west choosing to opt for lower priced base costs, the only option is to source items from other destinations. Being able to keep costs lower, by sourcing from these locations, and still get the benefit of having a speedy delivery means that businesses can remain competitive. This also enhances the economies in both Europe and Asia as business activity can be optimised for quick turnarounds.
What Sea Freight Services Do Radius Offer?
For companies looking to benefit from lower-priced materials and products sourced from overseas, it can quickly become a costly exercise if the correct shipping process is not chosen. Sea freight services allow rapid facilitation of orders, especially when routes such as the Suez Canal are utilised.
We offer a range of sea freight services to support small and large businesses in receiving resources quickly. As well as ensuring orders are with you quickly, sea shipping offers additional benefits such as increased safety and the ability to transport hazardous materials. We aim to prove that sea shipping is a feasible solution for customers around the UK, with any stresses or concerns being eliminated from the outset.
Our team will help you plan a recommended route and manage the sea freight shipping documentation to ensure orders are never delayed due to regulation mishaps. We also provide detailed information on what you must know about the exporter records and regulations to take away any guesswork. No matter what sector, size, business, or order you need, our team can take the stress away from sea shipping.
To learn more, request a quote or contact our team directly. Including your shipment in the 12% global trade the Suez facilitates is much simpler than you think.
