Egypt Crisis and the Suez Canal

With all of the news about Egypt lately, everyone in the international logistics industry starts to wonder how this unrest will affect international shipping in the Suez Canal. The Suez Canal is the cut through from the Red Sea to the Mediterranean Sea which lessons transit times so that ships do not need to go all the way around Africa to get from one sea to the other. The Suez was originally controlled by a company called the Suez Canal Company, but after the Suez Crisis in the 1970’s, the Egyptian government took ownership. This seems to make sense since the canal is cutting through the country of Egypt.

Up until more recently there have been very few problems with this setup. Some people now are getting more worried as the region becomes less settled especially with the amount of anti-American sentiment. The Suez Canal has become a very important part of international trade since it essentially connects Asia to Europe in a more direct route allowing for much better transit times for international shipping companies. Any disruption to this pass through could be catastrophic to the shipping industry. With Egypt in control of the Suez, whoever is in power in Egypt will control the Suez and can decide who will be able to pass through and what charges they will need to pay. This is why there is so much concern about who rules in Egypt. Hopefully the instability will subside soon so we can avoid any long term damage to the shipping and logistics community.