During the past centuries, the United States of America, a maritime superpower, ensured the security of the international Sea Lane of Communication (SOLC) for commercial shipping.
There are many chokepoints around the world such as the Straits of Hormuz, an important chokepoint responsible for the distribution of oil from the Middle East to the rest of the world. Other important chokepoints include the Suez Canal, Panama Canal and the Malacca Straits.
For shipment of oil, the Hormuz Straits is the most important chokepoint. Oil tankers carry out 17-18 million barrels of oil per day. The Malacca Straits is the second most important. Approximately 12 million barrels of oil shipped from the Hormuz Straits, pass through the Malacca Straits on a daily basis to be then shipped to ASEAN and other important East Asian countries such as China, Japan and South Korea.
The Southeast Asian region is made up of many islands as well as five ASEAN countries such as Brunei, Indonesia, Malaysia, Singapore and Thailand. Almost every ocean-going vessels need to travel from the Indian Ocean to the Pacific Ocean and have to navigate through various chokepoints such as:
Among Sea Lanes of Communication, going through the Malacca Straits is the shortest route. Therefore, more than 90% of ocean-going vessels navigate through this chokepoint. In addition to oil tankers carrying approximately 12 million barrels on a daily basis, dry cargos also pass through this chokepoint. The value of cargos passing through the Malacca Straits represents approximately 15%-20% of world trade. The British Broadcasting Corporation reported in 2010 that the number of vessels passing the Malacca Straits exceeds the number going through the Suez Canal by six-fold, totalling some 4,231,856,649 DWT.
The Straits of Malacca is approximately 23 meters deep. The narrowest section of the waterway is 1.5 miles wide. Should the Malacca Straits become congested or blocked for any reason, world trade would come to a halt. An enormous amount of world cargo would be held up or shipping of goods would slow down. Cost of cargo shipment would increase and the chain reaction could drag the economies of the Asia-Pacific Region into a downward spiral.
In 2025, it is estimated that there will be 122,500 vessels passing through the Malacca Straits. The Japan International Transport Institute (JITI) estimates that there will be 140,000 vessels in 2020. According to calculations made by HM Ibrahim and Mansoureh of the Maritime Institute of Malaysia (MIMA), the Malacca Straits will be able to accommodate 122,640 vessels per year [Arrival rate at (TFR= 0.27 = 7vessel/hour c.c =7 x 24 x 365 x 2 = 122,640 )] (9). By 2024, ie. in ten years, the Malacca Straits will be more than congested. It will not be able to ensure punctual throughway for ocean-going vessels nor guarantee their safe passage. The vessels will have no other choice but to opt for the longer alternative routes passing through the Straits of Sunda and the Straits of Lombok. The other option would be that the countries using the Malacca Straits levy tolls on cargo vessels in order to compensate those that are forced to opt for alternative but longer routes. In any case, it is estimated that the cost of navigating between the Indian Ocean and the Pacific Ocean will definitely increase.
Attempts have been made to limit the number of vessels passing the Straits by stipulating that super- tankers be banned from the Malacca Straits. Another suggestion was to collect taxes from users of the Malacca Straits. These taxes would then go to improve shipping facilities and protect the environment. Malaysia and Indonesia have tried on many occasions to push these policies through but they always encountered opposition from Singapore which feared negative impact on its port revenue.
In any case, the increasing shallowness of the Malacca Straits is becoming an important obstacle for Very Large Crude Carriers (VLCC) to pass through the waterway. At present, VLCC represent 50% of all shipping traffic passing through the Malacca Straits. In 1993, three 160 DWT Very Large Crude Carriers (VLCC) passed through the Malacca Straits per day. These supertankers need to have a draft of 19.4 – 21.2 meters. At present, certain sections of the Malacca Straits only have a draft of 21.1 – 22.9 meters. Normally, fully loaded VLCCs need to have at least 1 meter between the hull and the seabed, a spread which is considered very precarious by all standards.
At present, both Singapore and Malaysia have installed a Vessel Traffic System (VTS) to help guide ships through the Malacca Straits. However, this VTS is not up to par when compared to the one used in the English Channel.
3.1 Shipping accidents
3.1 Shipping accidents occurred 236 times in the Malacca Straits between 2001-2007.
The most serious accident to fear is when a supertanker leaks oil which would immediately impact the environment of countries bordering the Malacca Straits. One such recent accident occurred in 2010 when the MV Waily ran into the MT Bungu Kelana and 18,000 barrels of crude oil spilled all over Singapore with some of it pour- ing into the Malacca Straits. Another very serious accident took place in 1997 when the Greek supertanker MT Evoikos carrying 130,000 tons of crude oil rammed into the oil tanker Orapin causing 29,000 tons of crude oil to spill into the sea. Luckily, the oil tanker Orapin was not carrying its full load. Nevertheless, islands and the 40 mile-coastline of Selangor in Malaysia were badly affected.
The extremely strong current from the Andaman Sea (Indian Ocean) crashes into the entrance of the Malacca Straits that is only 250 miles wide (from north to south) meeting with the current flowing from the South China Sea (Pacific Ocean) arriving right at Singapore which is situated at the narrowest point of Malaya, only 1.9 sea miles wide. This clash of currents moving at different velocities represents a great danger for ships using the Straits. Islands also represent obstacles for shipping traffic, especially at nighttime. Smoke and fog as a result of forest fires on the islands of Sumatra in 2005 and 2009 covered the Malacca Straits to such an extent that visibility was reduced to 50 meters.
There is a large number of ferry boats trading in local products between
Singapore and Malaysia on the one side and Indonesia on the other.
Within the period of six years, the number of ferry boats between Singapore- Malaysia and Indonesia has increased from 10,000 vessels to 30,000. The crossing point is usually at the narrowest point of the Straits. It is the most dense and the most dangerous area, highly prone to accidents.
At present, there has been no attempt to organize or manage the cross-traffic in the Malacca Straits. Therefore, free crossing of the Straits is putting ocean-going vessels at high risk. These vessels have to often slow down in order to avoid accidents.
Pirate ships have regularly attacked ocean-going vessels that have had to slow down when going through the Malacca Straits. Piracy incidents reached its height, 75 cases, in the year 2000. After that, the number of piracy cases began to drop when in 2004, Singapore, Malaysia and Indonesia implemented joint coastal patrols and in 2005, air surveillance.
Nevertheless, it is possible that in the future, religious differences and conflicts instigated by religious fanatics may create a situation, whereby navigation in the Straits of Malacca could be hampered.
The lack of security for shipping traffic has made Lloyds designate the area in 2005, a zone of conflict similar to conflict situations in Somalia, Iraq and Lebanon. However, since countries sharing the international waters succeeded in suppressing piracy, Lloyd revised its categorization of the Straits for shipping back to normal in the year 2006.
As mentioned in the beginning, the Malacca Straits represent the shortest navigational route between the Pacific Ocean and the Indian Ocean. It is, in fact, the most congested chokepoint in the world. In 2007, more than 4,200 million DWT of cargo passed through the Malacca Straits, calculated as 15% – 20% of the value of world trade. Crude oil represents 50% of that and containers carrying cargo another 24%.
Tankers of various sizes carry a total of 12 million barrels of crude oil. 50% or 6 million barrels of that are transported to China and the remaining amount to Japan, South Korea, Taiwan, etc. Approximately 800,000 barrels are destined for Thailand on a daily basis with 1,500,000 barrels per day to Singapore.
1. In the short term
1.1 The transportation price of crude oil would immediately jump 3 digits (14)
1.2 A large amount of cargo would be stuck at the port with no way of immediately moving them out.
1.2.1 Cargo would be remain in the Singaporean Port and Port Klang (Malaysia), both countries impacted directly by the situation in the Malacca Straits.
1.2.2 Cargo would also be held up in other ports such as at Laem Chabang (Thailand), Hong Kong, Shanghai, Shenzhen, Ningbo, Guangzhou (China) and Busan (South Korea). All are among the largest container ports in the world that together service more than 250 million TEU per year. Cargo worth many billions of US Dollars would be held up in these ports. Should this amount of cargo have to travel through the alternative shipping routes of the Straits of Sunda and the Straits of Lombok, the additional distance would cause the cargo transportation price to rise immediately.
In the short term, there would be a shock effect in world trade. Prices of fuel, energy and manufactured products would also suddenly rise. Production prices would rise. There would be a shortage of goods. There would be an economic depression. Two-thirds of the world population living in Asia would immediately feel the sudden crisis.
Should the Malacca Straits be blocked for any length of time, ocean-going vessels would be forced to use alternative sea lanes of communication such as the Straits of Sunda and the Straits of Lombok which will represent one of the major changes in maritime navigation.
2.1 The Port of Singapore will lose its significance. At present, Singapore is not merely a throughway for ocean-going vessels but is actually an important trans- shipment center in Asia. Every year, around 101,000 small and large vessels carrying approximately 678.6 million tons of cargo pass through the Port of Singapore.
2.2 The cost of shipping crude oil from countries in the Far East (China, Ja- pan, etc.) will increase by 0.4% of the cargo value. As for shipping by container, the increment will be 0.2% of the value of the cargo.
2.3 Countries acting as economic motors in Asia such as China and Japan will turn, more and more, to procurement of fossil fuels from Russia and other countries situated on the Land Silk Route.
2.4 The economic reality of countries dependent on trade (measured by GDP) show that shipping traffic in the Malacca Straits will decrease in the short as well as the long term.
Conclusion: One cannot guarantee that once the Kra Canal is built by Thailand, a certain number of ships would use this new navigational route. However, after preliminary consideration, the following conclusions can be reached: