Violence in Egypt Threatens Freight Shipments Thru Suez Canal

Egypt and Upheaval: What’s happening and what it means for import/export traffic through the Suez Canal.

An article posted two days ago (Jan 29^th) in the Telegraph described Egypt as a nation on the verge of “collapse”.[1]

The details of the political situation indicate hard times ahead for citizens of Egypt and an uncertain future for those importing and exporting goods via the Suez Canal.[2]

In the past week, three Suez Canal cities have endured the worst of the violence in Egypt, along with uprisings in Cairo. Because of this, the army has been dispatched to those cities in order to maintain security, imposing military law as an emergency measure.[3]

The problem is, liberal Egyptians fear this is a prelude to establishing permanent military rule under President Mohammed Morsi.

As Morsi struggles to gain control, rioters and armed vigilantes seethe and the nation seems to be spiraling downward.

Armed insurgents invaded the foyer of the Semiramis Intercontinental Hotel in Cairo, firing their weapons. When the police failed to respond, the threatened staff resorted to “using Twitter to appeal for help”.[4]

The conflict in Egypt is part of a larger movement in the Maghreb and in the Middle East, the so-called “Arab Spring”, which began 2 years ago.[5] This movement within various nations has been characterized by the sort of violence we are seeing in Egypt with similar goals/effects, i.e. the toppling of entrenched authority.

The ousting of these leaders has often been followed by political turmoil as new leaders seek to establish equilibrium under still-shaky provisional governments. These nations, long held under dictatorships, struggle to quickly hammer out better, more responsive systems of government.

The prime example of this is Egypt. Ex-president of Egypt, Hosni Mubarak stepped down from his presidency in February 2011 in the midst of a storm of protest against his heavy-handed rule. But the scramble to fill the power vacuum has left the new Egyptian government to rein in radical fringe factions using the dubious weapon of the military.[6]

Since Mubarak himself used violence and the threat of violence as a pretext for keeping Egypt in a state of “emergency” for 30 long years,[7] it is easy to see why many Egyptians do not trust the use of military force, even as an ostensibly temporary cure for the violence breaking out in the streets.

The violence has international repercussions, especially as the Suez Canal runs right through eastern Egypt, between the mainland and the Sinai Peninsula. The Suez is a conduit for millions of tons of freight shipped between Europe, Africa, and the Far East.

It is natural to wonder how the political turmoil in Egypt will affect global economics as key port cities along this narrow corridor are threatened.

Three cities, Port Said, Ismailia, and Suez, have seen so much violence that President Morsi has declared martial law within them. Violence in Port Said left 40 dead. Death-tolls in the other cities were undetermined.

In order to protect personnel, ISS (Inchcape Shipping Services, the main maritime service provider there) recommends that no one embark/disembark in these cities from ships navigating the canal. [8]

ISS also “suspended all husbandry services at all Egyptian ports including crew changes and transfers, Cash to Master, and shipments delivery as road transportation is currently deemed unsafe”.

Despite all this, import/export continues, with vessels proceeding safely through the canal only because of the security provided by the military.

While Egyptian officials are eager to reassure carrier companies that the Suez Canal is safe for import/export traffic, it is clear that the unrest is straining Egypt’s new government, putting its authority to the test. If peace is not restored, it seems likely that not only will Egyptian citizens suffer even more violence, but the flow of international commerce through the canal will also be interrupted.

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