During the heydays of the British Empire, when it was entrenching itself ever so firmly in the heart of the Indian Ocean, it could not have failed to appreciate the strategic and economic advantages that a direct trade route through the Red Sea and the Mediterranean would confer. The two seas had after all been historically linked for millennia, till an eighth century Abbasid Caliph had it closed for supposedly tactical reasons. In more modern times, the idea of building a canal through the Isthmus of Suez has been credited to the French Emperor Napoleon Bonaparte, who during an expedition to Egypt in 1798, was quick to grasp its utility in pressuring his country’s traditional foe. The plan had to be aborted soon after, when a miscalculation in the sea level measurement between the two seas scuttled its feasibility.
A serious breakthrough in the construction of the canal occurred in 1858 when another Frenchman, Ferdinand de Lesseps, a diplomat as well as an engineer, used both his skills to convince the Egyptian Viceroy, Said Pasha, of the benefits of the project. Construction officially began on 25 April 1859 and when the canal finally opened for traffic around ten years later, it had an immediate and significant impact on world trade.
The canal’s subsequent history is intriguing. The joint French-Egyptian ownership embodied in the Universal Ship Suez Canal Company that was formed to execute the project received a jolt when Egypt, plagued by a debt crisis, offloaded its shares in 1875 to the British. The next setback occurred in 1956 when Egypt’s populist strongman attempted to unilaterally nationalise the canal in a bid to finance the Aswan High Dam project, a virtual lifeline for the country, rather than wait for another 13 years for the concession to expire. This dragged the country into a needless and costly war with the two co-owners as well as with Israel. In retaliation, Egypt shut down the waterway by deliberately sinking 40 ships there, something akin to cutting off its nose to spite its face. The canal could only reopen for traffic in March 1957, four months after a UN sponsored truce. The canal again remained inoperative for eight long years in the aftermath of the Arab-Israeli war of 1967 till a peace treaty underwritten by the United States made its reopening possible.
After assuming full control of the canal in 1962 by buying off the owners, Egypt set up the Suez Canal Authority to regulate it’s working. Apart from income generation through transit fees, the canal also furnishes livelihood to a number of people, employed both within and without. From a single sleepy settlement of around 4000 inhabitants when the canal’s construction began, a large number of industries have crept up all along the western flank of the canal, as well as the ports of Said and Suez at either end.
Though the canal is a cash cow for a cash-strapped nation, it’s working is still plagued by delays and systemic inefficiency. All those who have traversed the waterway would know that each vessel has to stop four times during the 18 hour passage, once at the Port Said outer anchorage, then at Port Said mooring, then at the Great Bitter Lakes anchorage and yet again at Port Suez. Apart from the canal transit fee, each ship owner has to embark and pay for four separate pilots, one at each stop, as well as for a couple of electricians who do nothing but sleep( for if you don’t, the ship’s movement is held up on the pretext of not having the specified lighting arrangements on board). In addition, each pilot unfailingly asks for some gift, even if it is only a carton of cigarettes.
As construction work on the Suez Canal was winding down, the same French entrepreneur, Ferdinand de Lesseps, got Colombia, then the parent state of Panama, interested in a canal designed to furnish a much shorter trade route between the Pacific and Atlantic oceans compared to the 8000 mile longer journey around the southern tip of South America, Cape Horn. But the construction which finally began in 1881 stalled 8 years later owing to the French construction company’s bankruptcy.
Colombia’s cool reception to a subsequent US proposal for reinvigorating the project peeved the latter country into encouraging an insurrection leading to Panama’s independence in 1903. Another French businessman, Phillipe Bunan-Vanilla, was thereafter authorised by the fledgling state of Panama to broker a treaty enabling the project to proceed while also conceding at the same time perpetual control of a 5 mile wide zone on both sides of the canal to the United States. Construction work on the canal, which took ten arduous years to complete, enabled the United States to expropriate for its own exclusive use a large swathe of land 50 miles across the Isthmus and to populate it with a work force from the US and the West Indies. Such an occupation, plus the fact that the Panamanian economy wasn’t benefiting much from the arrangement, generated a lot of resentment amongst the local populace which flared into widespread anti-American riots. It took a Statesman-President like Jimmy Carter to negotiate a fresh treaty obligating the US to return 60% of the canal land to Panama within two years. As the treaty took effect, a binational Panama Canal Commission also came into being, which managed the canal from 1979 onwards, making the final transition of 1999 much smoother.
Known as a marvel of waterway engineering, the Panama Canal is a two-way channel like no other. With its artificial lakes and channels, it incorporates three sets of locks which enable a vessel entering from the Atlantic side to be physically lifted upto a height of 26 meters above sea level, descending thereafter in two stages. This innovative arrangement was resorted to in order to curtail the excessive amount of excavation which would otherwise have been required.
This canal in due course gave rise to a new term, Panamax, which essentially refers to the largest carrying capacity of a ship that can safely transit the canal, 55000 dwt for tankers and upto 3999 TEUs for container ships. Those ships which could carry more than 4000 TEUs came to be referred to as post-Panamax. As ship payloads kept increasing, touching 20,000 TEUs by now, vessels beyond a carrying capacity of 8000 TEUs came to be known as neo-panamaxes.
The importance of these two canals to the health of the international maritime community and indeed to the global economy did not go unrecognised. The 1888 Constantinople Convention(which Britain was reluctant to sign till 1904) required the Suez Canal to be kept open to ships of all nations in both peace and war, but could not prevent its closure at times, as mentioned earlier. Similarly, the US-Panama treaty of 1977 confirmed the status of the Panama Canal as a neutral international waterway where every vessel is guaranteed safe passage at all times.
As ship sizes were seen to be continuously increasing, the Panama Canal Authority(ACP) launched an ambitious $5.4 billion expansion plan in 2007 aimed at garnering a greater share of shipping. The project, which envisaged two new set of locks, excavation of new channels, widening and deepening of existing channels and raising the maximum operating level of the Gatun Lake, was finally completed on 26 June 2016. Though the ACP was expecting a windfall from this endeavour, with ship-handling capacity having been enhanced from 5000 TEUs to 14000. Preliminary assessments show that while the average ship size has risen from 4600 to 6400 TEUs, the number of vessels transiting the canal has correspondingly decreased. Overall, ship transits are running well below the canal’s current capacity, with less than a third of the available slots being taken. The new lock chambers now allow for an estimated 79% of all cargo carrying vessels to transit the canal, up from 45%.
Strange as it may seem, the two canals, Suez and Panama, although half a world apart, figuratively speaking, are also in competition for that significant chunk of shipping traffic that takes place between the South China Sea region and Western Europe or even the US East coast. In addition with low bunker prices favouring the use of the longer route round the southern tip of Africa by larger ships, the Suez Canal was faced with another unlikely rival. General Sisi, on taking over the reins of a financially distressed nation, made the canal’s upgrade his topmost priority in a bid to enhance revenue generation. After all, he had history on his side: the number of ships using the canal had risen sharply from 486 transits in 1870(the first full year of operation) to 17,148 in 2014, with the net tonnage also registering an increase from 444,000 MT to 963 million MT during the same period. Net revenue for the year 2014 was touching $5.5 billion. An ambitious $9 billion upgrade was thus launched with the objective of not only permitting larger ships to transit but also to reduce wait times by allowing both Northbound and Southbound ships to pass simultaneously. This project, completed on 6 August 2015, added nearly 30 km of side channels to its original length of 164km. The high expectations which the Suez Canal Authority had(the traffic doubling and revenue tripling over next 8 years) doesn’t seem likely to materialise, with revenue generation during 2016 not much different from 2014.
In one respect at least, the Panama Canal has outmaneuvered the Suez by garnering a greater share of the container traffic between the United States and East Asia, raising it from 48% to 54% at present. And the game goes on.
Both the canals – Suez and Panama – are not only feats of human ingenuity but also of technical dexterity. Born out of a need to facilitate easier sea trade access from the Indian Ocean to the Atlantic in one case and from the Atlantic to the Pacific in the other, they furnished the much-needed fillip to world trade, bringing the era of globalization a step nearer to reality. Through their ability to bring the major continents of Asia, Europe and America that much closer, these canals have proved to be long-standing testaments to man’s skill and versatility.
Note: This article was published in the March 2017 issue of the ‘Global Age’ monthly magazine.
