Scrutinizing the tradition: What are the economic implications of circumnavigating the African continent instead of using the Suez Canal?
Typ
Examensarbete på kandidatnivå
Bachelor Thesis
Bachelor Thesis
Program
Publicerad
2024
Författare
Andersson, Teodor
Barret , Wilmer
Modellbyggare
Tidskriftstitel
ISSN
Volymtitel
Utgivare
Sammanfattning
This Bachelor thesis, conducted at Chalmers University of Technology, examines the economic
implications for circumnavigating the African continental as an alternative to using the Suez
Canal, for container vessels in varying market conditions. The case study was motivated by
historical disruptions in the Suez Canal, including blockages and recent geopolitical tension
that forced commercial vessels to reroute via the Cape of Good Hope. The research analyzes
the additional operational cost incurred from the alternative routings and models the break-even
points under different market scenarios and space utilization.
Through quantitative analysis, including case studies and economic modeling, the thesis
explores how the vessel size optimization and route selections effect a vessel and subsequently
the transport service provider’s economic result. The findings indicate significant economic
impact of route choice, which vary according to market conditions and ship capacities. Key
findings indicate that larger vessels benefit more significantly from economies of scale, which
can compensate the increased cost associated with the longer sailing around the Cape of Good
Hope, particularly in a high market condition.
The study is limited to the economic aspects of rerouting a vessel from far east Asia to the
northwest continent of Europe. It does not account for environmental impacts or geopolitical
risks associated with the routes. Additionally, it focuses solely on the container shipping
segment, excluding other types of maritime transport. These limitations suggest areas for
further research to develop a more comprehensive understanding of the broader implications of
Suez Canal disruptions on global shipping logistics.
Beskrivning
Ämne/nyckelord
Suez Canal , Economies of scale , Red Sea Surcharges , Container Shipping , Cape of Good Hope