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Geographical Impacts of the Suez and Panama Canals
The construction of the Suez and Panama canals had substantial impacts on global trade, mainly over two factors. The first and most obvious concerns the reduction of travel distances between economic regions. The second relates to the introduction of the steamship during the same time period which was able to use more direct routes at a faster and consistent speed, compounding the gains from shorter travel distances.
Planned by the French but constructed by the British, the Suez Canal opened in 1869. It represents, along with the Panama Canal, one of the most significant maritime "shortcuts" ever built. It brought a new era of European influence in Pacific Asia by reducing the journey from Asia to Europe by about 6,000 km by skipping a detour around the Cape of Good Hope. Asia became more commercially accessible and colonial trade expanded as a result of increased interactions because of a reduced friction of distance. Great Britain, the maritime power of the time, benefited substantially from this improved access.
The strategic importance of the Suez Canal endures, particularly because of the Middle Eastern oil trade and the Pacific Asian commercial trade. The journey from the Persian Gulf to the Northern European range is particularly impacted by the Suez Canal as a 21,000 km journey around Africa taking 24 days is reduced to a 12,000 km journey taking 14 days.
The Panama Canal, completed in 1914, considerably shortened the maritime distances between the American East and West coasts by a factor of 13,000 km.