Salem Y. Lakhal
Université de Moncton, Canada
E-mail: salem.lakhal@umoncton.ca
Souad H’Mida
Université de Moncton, Canada
E-mail : souad.hmida@umoncton.ca
Submission: 23/01/2017
Revision: 04/02/2017
Accept: 10/02/2017
ABSTRACT
Israel and China have finalized a project plan initiated in 2012. This
project received the green light from Israeli cabinet in March 2014. With this
venture, China will build a cargo railway line connecting the port of Eilat in
the Red Sea to the ports of Ashdod and Haifa on the Mediterranean coast in
Israel. This project will be a shipping alternative to the Suez Canal. This
statement is the corner stone of this paper and considered a hypothesis to be
verified within this paper. The methodology used is based on
the concept of “market position.” The main conclusion, theoretically, the Red-Med railway
could be an alternative to the Suez Canal for the 4,000 TFE Vessels containers
transportation as far as costs are concerned. However, other issues, such as
terrorism incidents, the security in the Suez Canal and the risk of its
shutdown, must be considered too.
Keywords: Suez Canal, Red-Med Sea Railway Line, Israel, Egypt, container transport.
1.
INTRODUCTION
Establishing
a railway line linking
the Red Sea and the Mediterranean Sea is
considered to be of strategic importance for Israel because it will serve as an alternative to the Suez Canal. For Israeli Prime Minister
Benjamin Netanyahu, the strategic importance of this project is the possibility of linking Israel to the
increasing and emerging economies of countries such as
China and India (LEVITT, 2014).
Prime
Minister Netanyahu states: “In the coming decade, new powers will arise and the
State of Israel must create vital interests from a national strategy
point-of-view. We have the ability to create an alternative transportation
route that bypasses the Suez Canal – this is an insurance policy. Israel must
become a continental land crossing route and create great power interests.” (ANONYMOUS, 2012; SCOTT, 2014; ISRAELI-GOVERNMENT,
2012).
Based
on thee geo-political picture in the Middle East, Israel continues to work on
maintaining its security, its economic independence, and its resilience (LAKHAL, 2017). To ensure
continued supply lines that are not interrupted by regional crises, Israel is
working to develop and create convenient and fast shipping and supply routes,
which connect the Mediterranean Sea to the Red Sea and provide access to the
greater Asian oceans.
In
this context, Israel imports raw materials, energy, and goods from countries in
Asia and Africa, which is accomplished by vessels navigating through the Suez
Canal, and, from there, to the ports of Ashdod and Haifa. However, there is no guarantee that the Suez Canal will remain open due to the
failure of the Egyptian Government to impose its
authority on the Sinai Peninsula since the coup on July 3, 2013.
In the event of a Suez Canal closure, the port of Eilat is a strong asset for Israel. The alternative route of going around Africa to enter the Mediterranean Sea is very expensive, while the port of Eilat could be a tangible alternative, which allows Israel to maintain its independence and not stay linked to its neighbours (Figure 1).
Figure 1: Current shipping
through the Suez Canal route versus the alternate route via the Red-Med railway
project.
Transportation from Eilat to the
centre of Israel is not sophisticated, currently does not allow for a fast,
large-scale transport of containers and goods. According to the Israeli point
of view, it is not necessary to watch events in Egypt to understand that the
port of Eilat is a strategic asset to Israel and to recognize that establishing
a rail line from the port to the centre would increase its value.
According to Verisk (2015), the ongoing crackdown in Egypt
against the political opposition would increase the potential for more frequent
terrorist attacks. Whilst the government
of President Abdul Fatteh Al-Sisi’s hard-line security stance has reduced the
likelihood of large-scale violent protests for the medium term, terrorist
incidents have become more frequent and ambitious under Al-Sisi’s time in
office – including in Egypt’s major urban hubs.
Over the past three years, a shift
towards more frequent and widespread terrorist attacks have been registered as
indicated in Figure 2 and 3. One-hundred-and-thirty terrorist attacks were
recorded over the 2014/15 period (VERISK, 2015). This significant increase
marks a more-than fourfold increase in the number attacks on the corresponding
2013/14 period (when there were 29 terrorist attacks in total). There were no
recorded terrorist attacks in the corresponding 2012/13 period. The chaotic
situation in Egypt gives compelling reason to Israel to go forward with the
Red-Med Railway project.
Figure 2: The increasing terrorism attack in Egypt
Figure 3: The evolution of number of
terrorism incidents in Egypt
Source:
https://www.start.umd.edu/gtd/search/Results.aspx?country=60
2.
LITERATURE
REVIEW
Despite some press articles related
to the Red-Med railway project, there are a very few academic studies
associated with bridging Asia to Europe by land transportation.
Looking for an alternative to the
Suez Canal become an issue for Israel after the closing of the Suez Canal
during the Sinai Campaign in 1956 and again after the June War of 1967 (GRADU, 1977).
The State of Israel was in a
position to use the Negev land bridge as an alternative to the Canal, whereby
freight could move between the Red Sea and the Mediterranean Sea. According to Gradu
(1977), immediately upon the 1967
closure of the Canal, representatives of Israeli economic concerns began to
look into the possibility of setting up such route.
Consequently, in 1970, a land bridge
was established by the Israeli shipping line, Zim, to provide cargo service
between Ashdod and the port of Eilat. Simultaneously, a 42-inch oil pipeline
with a capacity equal to 60 million tons per year was laid via the Negev from
Eilat to Ashdod.
The use of the continental bridge
for cargo traffic and the pipeline for the oil transportation gave viability to
the opportunity for a railway link between port of Eilat and the ports on the
Mediterranean Sea. As container cargo increases, a railway project could be a
strong alternative for this kind of freight.
An economic concern, Gradu (1977), reported that the Israeli
Transport Ministry conducted a calculation of the difference in costs between
the route around Africa and the continental bridge and found that despite
several bulk transfer points, a large percentage of the cargoes could be
transported at lower cost via a continental.
The Red-Med Railway could have an
important historical dimension in the eyes of some Israelis. For example, Schlegel
(2013) points to the Bible where God,
through the prophet Ezekiel, says, "This is Jerusalem; I have placed her
in the center of the nations, with countries round about her" (EZEK. 5:5).
Schlegel adds that Canaan-Israel is
a narrow strip of land from the Mediterranean Sea to the Jordan River is 45
miles –sitting at the center of three continents: Asia, Africa, and Europe. The
Israeli geographic position gives the country great importance as a land-bridge
between the three continents, particularly between the two most ancient cradles
of civilization – the Mesopotamia and Nile River basins.
Historically, Canaan-Israel has been
coveted by empires in Asia, Africa, and Europe for this geo-political
importance as a commercial and military hub connecting the continents. For Schlegel
(2013), “The Sovereign God has chosen
this land at the "center of the nations" to work His purposes for
mankind Economy”.
The research questions are:
(1)
Could the Red-Med Railway
provide a viable alternative to the Suez Canal for container traffic between
Europe and Asia?
(2)
Is the Red-Med Railway cost
competitive compared to Suez Canal?
(3)
Does the Red-Med Railway,
as a possible complementary route to Suez, represent an opportunity to improve
responsiveness and adaptability in supply chains?
The methodology used is represented
in Figure 4, and it is the one used by Notteboom (NOTTEBOOM, 2012;
NOTTEBOOM, 2011), based on the
concept of “market position.” This is made operational by analyzing and
comparing transit times and generalized costs on a set of origin–destination
relationships.
Figure 4: Methodology used
The paper is structured as follows:
section 3 presents the logistic analysis of the transfer of vessels cargo
charged by 8000 TFE (twenty feet equivalent) containers. Section 4 develops the
competitive costs between the Suez Canal and the Red-Med railway. Section 5
draws up a set of conclusions.
3.
RED-MED
RAILWAY AS AN ALTERNATIVE TO THE SUEZ CANAL FOR CARGO FREIGHT
The map in Figure 5 indicates the
principal characteristics of the Red-Med railway project; some of these
characteristics will be discussed later. On the other hand, the investigation
on the relevant features of the Suez Canal to the Red-Med project are
represented on Figure 6. In 2014, more than 38 million TFE containers were
shipped by the Suez Canal (see Table 1 & 2).
3.1. The determination of the transit time through the Suez
Canal
The transit time from Port Said to
Suez (southbound convoys) is between 14 and 16 hours, with the vessels arriving
in a minimum of six hours before the transit time (EL-SHARKAWY,
2016). Then, between
20 and 22 hours are required to ship cargo through the Suez Canal.
The transit is organised by convoys
in both directions. For example, convoys may begin at 0100 hours up to 0500
hours; therefore, the time of arrival at anchorage is 1900 hours. Vessels
arriving at 1900 hours to 2100 hours may join the convoy but there is a
surcharge of three percent (3%) of canal dues. Vessels arriving at 2100 hours
to 2200 hours may join the convoy with an additional five percent (5%) of Canal
Transit Dues.
Consequently, if a vessels misses
the time limit window of arrival at anchorage and if it does not want to pay
the surcharge, it must wait until the next convoy commences at 0700 hours to
0900 hours (EL-SHARKAWY,
2016). In this case,
the vessel will have to wait six more hours, making the total transit time
between 26 to 28 hours.
For convoys taking the south/north
direction from Suez to Port Said (northbound convoy), there is only one convoy,
which commences from 0500 hours to 1000 hours. The transit time is between 12
to 14 hours (LETH, 2016). The arrival time is 0200 HRS
with a surcharge payment required varying between three percent (3%) to ten
percent (10%) of the normal transit dues with a maximum between 7,000 to
20,000SDR (Special Drawing Rights) with 1SDR equal to 1.5USD (IMF, 2016). Vessels arriving after 0700
hours must wait 19 hours for the next convoy. For the northbound direction, the
transit time could be between 15 and 37 hours.
Figure 5: The Red-Med railway as an alternative to the Suez Canal
|
Source: El-Sharkawy Group
shipping & Trading (El-Sharkawy, 2016) |
Figure 6: The main Suez Canal features
Table 1: Evolution of the nautical characteristics of the Suez Canal.
Unit |
1869 |
1956 |
1962 |
1980 |
1996 |
2001 |
2010 |
2015 |
|
Width at 11 m depth |
m |
-- |
60 |
89 |
160/175 |
180/200 |
195/215 |
205/225 |
205/225 |
Maximum draft of vessels |
feet |
22 |
35 |
38 |
53 |
58 |
62 |
66 |
66 |
Overall length |
km |
164 |
175 |
175 |
189.8 |
189.8 |
191.8 |
193.3 |
193.3 |
Doubled parts length |
km |
– |
27.7 |
27.7 |
77 |
77 |
79 |
80.5 |
113.3 |
Water depth |
m |
8 |
14 |
15.5 |
19.5 |
21 |
22.5 |
24 |
24 |
Max. tonnage of vessel
(DWT) |
ton |
5000 |
30,000 |
80,000 |
150,000 |
180,000 |
185,000 |
210,000 |
240,000 |
Source: Author elaboration based on data Suez Canal
Authority.
Table 2: Traffic Containers through the Suez Canal from 2000 to 2014
(No. of TEU's by Ship Status)
Source: the Suez Canal
Authority: www.suezcanal.gov.eg/TRstat.aspx?reportId=8
|
Source: Author’s calculation based on data Suez Canal Authority.
Note: the traffic containers statistics are no more
available in the Suez Canal website (verified on 2106 Dec. 15)
3.2. The determination of the transit time through the
Red-Med railway
·
unload the containers from
the vessel;
·
load the containers on the
train;
·
transport the containers to
the other coast; and
·
load the containers on
another vessel to continue its route.
3.2.1. Vessel
unloading and train loading time
3.2.2. Train
transportation time from the Red Sea to Mediterranean Sea
Table 3: High-speed rail freight
Denomination |
Maximum speed |
Predominant vehicle |
High-speed rail freight |
>200 km/h |
Modified high-speed
passenger trains Fixed train-sets |
Semi-high-speed rail
freight |
140-200 km/h |
Both vehicles based on
passenger train concepts and further developed freight wagons Fixed train-sets as well
individual freight wagons |
Conventional rail freight |
<120 (140) km/h |
Conventional freight
wagons |
Source: (Troche,
2005)
3.2.3. Train
unloading and vessel loading
Table 4: Train’s time cycle to transfer a container load between
Eiliat-Ashdod
Table 5: Time needed to transfer 8000 TFE from Eilat (Red Sea) to Ashdod
(Mediterranean Sea)
3.2.4. Capacity
estimation of Red-Med Railway
3.2.5. How
big should be the port of Eilat and Ashdod to replace the Suez Canal?
Table 6: Annual traffic in millions of TFE sorted by the important ports
in the World
|
Countries |
2015 |
2013 |
2012 |
2011 |
2010 |
|
1 |
24,205 |
33,617 |
32,529 |
31,739 |
29,069 |
||
2 |
30,922 |
32,240 |
31,649 |
29,937 |
28,430 |
||
3 |
36,537 |
23,278 |
22,940 |
22,570 |
22,509 |
||
4 |
20,073 |
22,352 |
23,117 |
24,384 |
23,699 |
||
5 |
Port of Busan |
19,467 |
17,686 |
17,046 |
16,184 |
14,157 |
|
6 |
20,627 |
17,351 |
15,670 |
14,510 |
13,144 |
||
7 |
Port of Tsingtao (Qingdao) |
17,436 |
15,520 |
14,503 |
13,020 |
12,012 |
|
8 |
Port of Canton (Guangzhou) |
17,590 |
15,309 |
14,743 |
14,260 |
12,550 |
|
9 |
15,592 |
13,641 |
13,270 |
13,000 |
11,600 |
||
10 |
14,111 |
13,010 |
12,300 |
11,580 |
10,080 |
||
11 |
12,234 |
11,621 |
11,865 |
11,876 |
11,145 |
||
12 |
|
10,860 |
8,060 |
6,400 |
5,242 |
||
13 |
|
10,350 |
10,000 |
9,603 |
8,870 |
||
14 |
|
9,937 |
9,781 |
9,636 |
8,871 |
||
15 |
8820 |
9,302 |
8,863 |
9,014 |
7,896 |
||
16 |
9,653 |
8,578 |
8,635 |
8,664 |
8,468 |
Author elaboration based
On
http://fr.wikipedia.org/wiki/Liste_des_plus_grands_ports_%C3%A0_conteneurs
3.2.6. How
many trains should the Red-Med railway have to be an alternative to the Suez
Canal?
4.
THE
COST COMPETITIVELY OF THE TRANSPORTATION THROUGH THE RED-MED RAILWAY
4.1. The unloading and loading cost
4.2. The train transportation cost
5.
CONCLUSION
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