Ocean shipping lanes serve as the life and blood of international trade. According to the IMO, about 90% of the world trade depends on the transportation of goods by sea.
Shipping lanes, both natural and man-made, are vital contributors to the freight industry, but some are busier and more important than others because of the trade routes they facilitate. Some of the busiest shipping routes across the world include:
The Panama Canal facilitates major trade between Asia and the U.S, Asia - East Coast U.S being its busiest vessel trade route. Serving as a straight connecting point for vessels travelling between the Atlantic and the Pacific Ocean that would otherwise have to sail around the Cape Horn and South America’s southern tip, the Panama Canal saves every vessel anywhere around 2000 to 8000 nautical miles every trip. This also makes it one of the most strategically built man-made shipping lanes in the world.
Its expansion in 2016 helped widen and deepen the existing route, almost doubling its existing capacity with the addition of two new sets of locks, one each on the Atlantic and the Pacific side. This allowed larger vessels, up to 14,000 TEUs, to pass through, which considerably increased the volume of cargo that travels on this trade lane.
According to the official statistics, the Panama Canal transported about 259,837,318 metric tons of goods, including coal, grains, minerals, metals, crude oils, fuels, and chemicals, across 12,245 transits in 2020.
To transit the Panama Canal, vessels face tolls and surcharges depending on different parameters. From 2020 there is for example a freshwater surcharge for all vessels passing through the canal.
2. Asia - Europe
The Suez Canal, one of the world’s most popular trade routes, is also the fastest and the most direct trade link between Asia and Europe, with energy, commodities, componentry, and consumer goods being the chief transportation items. In 2020, about 19,000 ships travelled on this 193 km route, representing 12% of global trade and 30% of global container traffic. The Suez Canal is also a key regional shipping hub for oil and hydrocarbons from Asia and the Middle East to Europe, responsible for transporting about 7-8% of the world’s oil and 8% of liquified natural gas.
Owing to the high volume of trade between Asia and Europe, almost all mega-ships, after they first enter the service, are deployed along this route. This is also one of the reasons why the 2021 Suez Canal blockage became an important obstruction to global trade.
Due to the recent Russia-Ukraine conflict, freight forwarders have now started taking a longer route via the Middle East to avoid this region.
The 400m-long (1,312 ft) container ship Ever Given’s blockage of the Suez Canal in March 2021 underscored its importance to the global trade community.
According to industry experts, the blockage that obstructed global trade along the Asia-Europe route for roughly six days cost the industry about $54 billion. Vessels that were rerouted had about eight additional days added to their journey.
As well as the Panama Canal, the Suez Canal also implements several tolls, depending for example on tiers on containers on the weather deck. Lower fees for example were granted to LNG carriers since the first of November this year.
3. Europe - UK
An estimated 22% of British imports from the EU and 30% of British exports to the EU travel over the Dover Strait, making it an important trade link between Europe and UK. The total valuation of trade between UK and EU countries is estimated to be about 123 billion USD, a number that makes up 25% of trade between these two regions, with postal and courier freight, computers, electronics, and transport equipment being the chief items transported along this route.
The strait is situated on the narrowest portion of the English Channel, marking the boundary between the channel and the North Sea that separates the UK from continental Europe.
This is also why it facilitates the shortest time for freight unit transit along this route, cutting transport time from 210 minutes to 90 minutes.
Any vessel crossing the English harbours and entering European harbour or those entering the North and the Baltic Sea through the English Channel have to pass over the Dover Strait. On the straight’s British side, the harbour of Dover, and on the French side, the harbour of Calais are considered to be two of the world’s most engaged harbours.
This makes it one of the busiest maritime routes globally, handling an estimate of 400 commercial vessels daily.
4. North America-Canada
The St. Lawrence Seaway facilitates shipping between American and Canadian waters, more specifically to upper parts of Canada. This route serves smaller ports directly and allows shipping right up to the final destination instead of carrying out loading activities at distant and larger ports.
This makes it the focal point of American and Canadian international trade. From Lake Ontario in Canada, it goes 1900 miles up to New York, serving important Canadian and American ports including Ontario, Illinois, Michigan, Minnesota, Ohio, Vermont, and Wisconsin.
The seaway handles 40-50 million tons of cargo annually, comprising iron ore, grains, mining products, liquid bulk energy products, dry bulk cargo, and breakbulk cargo. Compared to the next expensive mode of transportation, transporting through the St. Lawrence Seaway saves about $3.6 billion in transportation costs which translates to significant savings, considering it handles 40-50 million tons of cargo annually.
In addition to cost savings, the St. Lawrence Seaway has also made navigation between America and Canada safer, boosting trading opportunities between the two nations. The earlier narrow section of the seaway has been widened, allowing easy and risk-free navigation of ships along this route.
The Strait of Malacca, forming the main and the largest passageway between the Indian Ocean and the Pacific Ocean, is a major shipping lane into and out of Asia. It connects three of Asia’s biggest economies: India, China, and Japan to each other and other important Asian economies such as Thailand, Indonesia, Malaysia, Philippines, Singapore, Vietnam, Taiwan, and South Korea, making it an important arterial shipping lane in the world. It shoulders one-quarter of the world’s sea trade, handling about 50,000 vessels per year.
Transport items include Chinese manufactured goods, Indonesian Coffee coal, and palm oil.
The Strait of Malacca is also the shortest sea route between Persian Gulf suppliers and key Asian economies, facilitating a large volume of oil transportation along this route. As per the US Energy Information Administration, nearly 61% or one-third of global petroleum production moving on maritime routes travel through the Strait of Malacca, making it the second-largest oil trade checkpoint in the world.
From the economic point of view, trade flow from the Strait of Malacca is especially significant to China. It serves as its pathway for energy products from the Middle East and raw materials from Africa, where China has invested billions of dollars in mining and infrastructure projects.
Local Charges and Other Surcharges
As for any waterway and local charges on the trade lanes, carriers apply surcharges and tolls and their shipping prices. Freight broker, 3PL or online calculators are helpful to estimate the upcoming surcharges for different kinds of freight and shipments
The trade routes mentioned above make up only a handful of the world’s ocean lanes. As the global trade industry grows, the maritime shipping industry grows too, and the complexity involved in moving goods along ocean lanes increases. Hence, companies and freight forwarders need better ways to transport their goods along major trade lanes.
Logistics tech providers such as Freightify can help find the best routes and quotes to get goods shipped. Technology solutions and tools provide the most accurate shipping rates, along with the ability to send quotes and receive bookings digitally. This allows the customer to take complete control over their shipping, which helps manage the innumerable tasks associated with transporting goods via complex ocean lanes in today’s times.
What are ocean trade lanes?
Ocean Trade Lanes are the routes that are regularly navigated by large vessels via wide waterways such as oceans and large lakes facilitating the movement of cargo. These routes support international trade by offering the fastest sailing times. It is usually safe, direct, and economic.
What are some important world trade lanes in 2021?
Some of the most important global trade lanes in 2021 in terms of volume are :
- Asia - US
- Asia - Europe
- Europe – UK
- North America – Canada
What are the important routes along major world trade lanes?
Some of the most important world trade routes are:-
- The English Channel
- Strait of Malacca
- Panama Canal
- Suez Canal
- The South and East China Seas
- Strait of Hormuz
- Strait of Gibraltar
- The Danish Straits
- St. Lawrence Seaway
- Bosphorus Strait
What commodities are transported on important global trade routes?
From machinery and petroleum gases to packaged or frozen food and vehicles, ocean vessels are modified to handle various types of goods through these global trade routes. Livestock, Equipment, Factory Parts, mineral ores, and chemicals are also commonly shipped.
What is the volume of cargo transported on major global trade routes?
Trans-Pacific routes accounted for 25 million TEUs of cargo flow in 2020. The Europe-Asia-Europe route accounted for 23 million TEU while Trans-Atlantic handled approximately 7 TEU. In total, around 11 billion tons of goods are transported by ship on average, each year. This represents an impressive 1.5 tons per person based on the current global population.