Since the opening of the Suez Canal in 1869, it has taken a unique position in global trade, bringing East and West closer together, and it has maintained this position throughout the 150 years of the canal. Recently, a group of projects for alternative routes to the canal have appeared, which we will review and see the extent of their impact on the canal.
Red-Med First: the Israeli line
Within the framework of the Belt and Road Initiative, China and Israel signed an agreement to establish a high-speed railway line with a length of approximately 354 km to transport goods between the port of Eilat on the Red Sea and the port of Ashdod on the Mediterranean Sea, which is known as the Med-Red Line, through which goods can be transported on railways. From the port of Eilat to the port of Ashdod on a high-speed double railway line, which is estimated to range from 225 km-305 km per hour, to be transported to the Chinese port of Piraeus in Greece, in addition to choosing a Chinese company to build the new port of Ashdod on the Mediterranean Sea at a cost of about 930 million dollars. .
By analyzing the cost, time and capacity components of the Israeli Med-Wid line in light of the scarcity of information, we find that according to some estimates, unloading, loading and loading one container ship with a capacity of 8,000 20-foot containers (which is considered a small size compared to the sizes of newer container ships with a capacity of 18,000 containers) takes approximately 70 hours. While it takes about 12-16 hours for ships to pass through the Suez Canal, in addition, unloading a ship like this requires a huge number of trains, approximately 132 trains operating 24 hours a day.
On the cost side, according to some estimates mentioned in a research paper issued by the Independent Journal of Management and Production in 2017, using estimates and calculations dating back to the year 2014, the cost of transporting the load of a ship with a capacity of 8,000 containers via the railway is about 3 times its counterpart in the Suez Canal. Add to all of this the need for a giant port that can accommodate a number of ships to wait for loading and unloading and the resulting storage yards, which is not available in the port of Eilat due to the geographical nature of the port, as well as the new port of Ashdod, which has a capacity of 2.16 million containers annually.
In addition to the above, the percentage of container ships out of the total ships crossing the Suez Canal is about 32%, followed by oil tankers with a percentage of 26%, and finally bulk cargo ships with a percentage of 19% of the total 18,174 ships that crossed the canal in 2018.
Therefore, we believe that the Israeli Mid-Wed line will not pose a major threat to the competitiveness and attractiveness of the Suez Canal, but it must be taken into account that it may pose a partial threat.