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
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