The Suez Canal: Past and Present

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Podcast Transcript

Africa is big. Really big. And for thousands of years, people have dreamed of a way to cut through the narrowest part of the Siani Peninsula to connect the Mediterranean Sea and the Red Sea to avoid sailing around Africa or crossing the desert..

In the 19th century, that dream was actualized. Since then, the canal has had its own history and has played a major role in the global economy.

Learn more about the Suez Canal, its shockingly ancient history, and its current role in global shipping, on this episode of Everything Everywhere Daily.

As I mentioned in the introduction, the Suez Canal has a surprisingly ancient history. 

The origins of the canal date back to ancient Egypt. Back then, the Egyptians weren’t so concerned with connecting the Mediterranean to the Red Sea per se.  They could get to the Mediterranean just fine via the Nile River. 

Their desire was to connect the Nile with the Red Sea. The Greek philosopher Aristotle actually wrote about it in his treatise Meteorology. He noted

One of their kings tried to make a canal to it (for it would have been of no little advantage to them for the whole region to have become navigable; Sesostris is said to have been the first of the ancient kings to try), but he found that the sea was higher than the land. So he first, and Darius afterwards, stopped making the canal, lest the sea should mix with the river water and spoil it.

The kings in question were during the 12th dynasty approximately 3,800 years ago. 

The canal, known as the Canal of the Pharaohs, was worked on during the reigns of various Egyptian pharaohs over a period of centuries. The Canal of the Pharaohs mostly ran west to east, connecting the easternmost branch of the Nile Delta to the Bitter Lakes, which was one of the lakes in the Siani just north of the Red Sea. 

If you look at a satellite image today of the Suez Canal, you’ll see a green line the curves to the west near the middle of it. That is the ancient location of the Canal of the Pharaohs. 

The canal was actually never fully completed until the reign of the Persian King Darius the Great, who had conquered Egypt.

Over the centuries, the Canal of the Pharaohs fell into states of disuse and disrepair. It is believed that during the reign of Queen Cleopatra, the canal had silted up and was no longer being used. 

In the 8th century, after the Muslim conquest, it appeared to be functioning again, but then it appeared to be closed only a few decades later. 

The problem was the Nile was continually depositing silt which meant that any canal connecting the Nile to the Red Sea would continually have to be dredged. 

The last time it might have been functioning was around the year 1,000. 

The idea of a canal was mostly forgotten for several centuries until the Age of Discovery began and Portugal began sailing directly to India. Venice had dominated the European end of the Silk Road and now was getting cut out by the Portuguese. 

The Venetians actually negotiated with Egyptian Mameluke rulers about reconnecting the Nile and the Red Sea but that came to naught when Egypt was conquered by the Ottoman Turks in 1517. 

It was the Ottomans who first really took the idea of connecting the Mediterranean and the Red Sea directly seriously, and not trying to go through the Nile. 

Their capital was at Constantinople and the Mediterranean was far more important to them than the Nile. They wanted easy access to India to counter the Europeans, as well as an easier, quicker route to Mecca for pilgrimages. 

While a direct Mediterranean link would mostly but not totally solve the problem of silting, digging a canal that long was a much more massive undertaking. 

The next group to take a swing at it was the French. Napoleon sent out a team to find evidence of the Canal of the Pharaohs, and they did. He also investigated a direct Mediterreaen-Red Sea canal but gave up on the idea because they thought that it would require locks because they believed that the Red Sea was actually 8.5 meters higher in elevation. 

In 1830, a survey conducted by British General Francis Chesney determined that both seas had the same level. Something we know today is that all the oceans everywhere are at sea level. 

This meant that the creation of a canal wouldn’t require any expensive and troublesome locks. It would literally just have to be a very long ditch. 

Here I should note that mid-19th century Egypt wasn’t occupied by the British yet. It was a monarchy founded by an Albanian named Muhammad Ali Pasha. It was established just a few years after the French pulled out.

I say this because, given the later control of the canal, many people think that the Suez Canal was built by the British, and it wasn’t. The canal was created by a private corporation called the Suez Canal Company, which was actually spearheaded by the French.

They received permission from the Egyptian ruler and as part of the charter, they were allowed to operate the canal for 99 years from its opening. More on this later. 

I mention all this about the British because the British were actually the biggest opponents of the canal. They controlled the Cape of Good Hope route as well as the overland route, and they were happy with the inefficient status quo.

The French were actually some of the biggest buyers of stock in the Suez Canal Company. 

Construction on the canal began in 1859. At first, the canal was mostly dug by poor people who were forced into labor. They were paid next to nothing, and there might have been 30,000 people working at any given time on digging the canal.

Progress was incredibly slow and in 1863, the ruler of Egypt banned the used forced labor on the canal. This required the company to shift to the use of new technology: steam shovels. 

The use of heavy machinery actually made everything go faster. In the end, ¾ of the canal was dug by steam shovels. 

The canal finally opened on November 17, 1869, to much fanfare. 

The canal was 193 kilometers or 120 miles long. When it was first constructed, it only had space for one ship at a time. There were spots built in the canal for ships to pull aside while other ships passed. 

A French sculptor by the name of Frédéric-Auguste Bartholdi wanted to build a giant 90-foot tall statue inspired by the Colossus of Rhodes called “Egypt Bringing Light to Asia”. The Egyptians and the company rejected it,  but he kept shopping the idea around until 1886 when it manifested as the Statue of Liberty in New York.

The canal ended up costing over twice the original estimate. The company was in financial trouble when the canal first opened. They had less traffic than expected the first two years. However, after they changed their pricing scheme traffic increased dramatically. 

After years of being the biggest opponents of the canal, the British Government purchased 44% of the canal after the Egyptian ruler Isma’il Pasha couldn’t pay off his debts. They purchased it for £4,000,000, which would be the equivalent of about $570 million today. 

In 1882, the British were invited in by the Egyptians to quell an uprising, and they took full control of the canal. 

In 1888, the Convention of Constantinople was signed which declared the canal to be neutral ground under the protection of the British. The canal was and always was, in fact, Egyptian territory. 

British control of the canal was via the Suez Canal Corporation and the  Convention of Constantinople.

With control of the canal, British attitudes towards it changed dramatically. It went from something they didn’t want, to one of the highest priorities of their defense policy. 

During the first world war, they defended it from Turkish attack, and in the second world war, it was the focal point of the entire North African campaign against the Germans. 

The canal became a major flashpoint in the cold war in 1956 during the Suez Crisis. After taking power and becoming president of Egypt just a month before, Gamal Abdel Nasser nationalized the canal.

His plan was to take control of the canal and then use the revenue to pay for the construction of the Aswan High Dam.

This provoked a reaction from the British, the French, and the Israelis. Israel invaded the Siani Peninsula, provoking a reaction from Egypt, which was the excuse the British and French needed to come in to occupy the canal in the name of security and stability.

After threats of involvement from both the United States and the Soviet Union, UN peacekeepers were brought in, in the first group of UN peacekeepers ever. 

I’m really just scratching the surface of this issue, and I’ll be giving it more attention in its own episode in the future. Suffice to say that just 12 years later in 1968, the canal would have reverted back to Egyptian control as per the terms of the original 99 year lease. 

The next major event in the history of the canal occurred in 1967 with the Six-Day War. Egypt kicked out the UN peacekeepers the end result was the Israeli occupation of the Siani Peninsula and a shut down of the canal for eight years. In a previous episode on the Yellow Fleet, I told the story of the 15 ships which were stuck in the canal that entire time. 

It wasn’t until 1975 that the canal was reopened. The ships sunk on either end were removed and all the mines were cleared. 

Since then, the canal has remained open, save for short-term events such as blockage of the canal in 2021 by the container ship Ever Given, which stopped traffic for a week.

Today, 10% of all international trade goes through the Suez Canal and 30% of all oil exports. The total cost to the world economy when it was blocked in 2021 was estimated to be $450 million dollars per hour. 

In 2015, there was a major expansion of the canal, the first one since it was opened. A second channel was created in the southern portion of the canal which allowed ships to travel in both directions simultaneously.

The expansion increased the number of ships that can pass through daily from 49 to 97 per day. The project costs $9 billion dollars, but it is expected to increase annual revenue from the canal from $5 billion per year to $12 billion.

A large merchant ship traveling through the canal is not cheap. For a ship like the Ever Given which ran around, carrying 20,000 shipping containers, it can cost $500,000 to $700,000 to pass through.

The time saved by going through the canal can vary. If you went from the northern port of Said to the southern port of Suez, it would take you 20 days by ship, versus 13 hours by the canal. However, almost no one does that route. It can shave as much as 10 days off depending on your speed and where you are going. 

Not every ship goes through the canal. Depending on fuel prices and the nature of the cargo, ships may still choose to go around Africa. This happened in 2020 when demand in Europe dropped for many goods due to the pandemic, and it was cheaper for many ships to go around as demand had softened and speed was no longer as necessary.

An even shorter route from Europe to China would be the northern route above Russia. Normally this would require ice breakers and it would only be possible for a few months each year, but now the ice is usually free for 6-8 weeks. The northern route cuts the distance down from Rotterdam to Shangai from 6,400 kilometers, using the canal, to just 4,000 kilometers.

The Suez Canal has been in operation for 150 years. Since it opened, it has been a vital part of the global economy. Given its strategic location on the map, it will continue to be so for as long as people transport goods by ship.

The associate producers of Everything Everywhere Daily are Thor Thomsen and Peter Bennett. 

Today’s review comes from listener bluebbe1 on Apple Podcasts. They write: 

Im in

Okay im addicted to this! Keep them coming!

Thanks, bluebbe1! It is well known by any dealer that first you have to get them hooked, then you move them up to the harder stuff. 

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