Maritime shipping routes are the veins that carry the lifeblood of international trade. But a combination of geopolitical tension, outdated capacity and changing weather patterns is clogging up the flow of the world's goods.
Strait of Hormuz About a fifth of the globe's oil passes through this strait each year, making the passage linking the Gulf to the Arabian Sea a crucial chokepoint. But in response to last month's Israeli and American air strikes on Iran's nuclear facilities, Supreme Leader Ayatollah Ali Khamenei hinted he could close it off completely. That would "trigger an oil price spike with a near-immediate inflationary effect" across the world, said The Guardian.
Suez Canal The 120-mile-long canal connecting the Mediterranean and Red Seas is "vital" for global trade and energy security, said the Atlantic Council. Between 12% and 15% of trade, and nearly a third of container traffic, passes through it each year, worth an estimated $1 trillion. As the "fastest sea route between Asia and Europe," disruption can have an "outsize" impact.
In 2021, the massive Ever Given container ship got stuck for six days, damming up worldwide shipping and freezing nearly $10 billion in trade per day. Iranian-backed Houthi rebels in Yemen have also ramped up attacks on ships in the Red Sea, which feeds into the canal, forcing freight companies to detour around southern Africa.
Panama Canal About 40% of all U.S. container traffic passes through the waterway that connects the Atlantic and Pacific Oceans. But the canal is not wide or deep enough for the new generation of container ships, so they have to circumvent the southern tip of South America. In recent years, "El Niño-triggered drought" has also "slashed transits," said The Interpreter.
Alternatives There are several plans in the works to connect the Atlantic and Pacific Oceans, including the Nicaragua Canal project. And as cargo volumes grow, corridors like land bridges and interoceanic "dry canals" become "more viable" and are "cheaper and faster to build," said The Interpreter. In addition, Mexico's Tehuantepec Interoceanic Corridor will connect the two oceans with airports, warehousing and other infrastructure when it's completed mid-2026.
Warmer weather is also opening up new routes. With some parts of the Arctic predicted to be ice-free during the summer within a decade, said the Financial Times, "military and commercial vessels, particularly from Russia, are stepping up activity." |