Danube-Oder Sea Canal - A Hot Spot of Business Opportunity

24 January 2024

Have you ever wondered about how the goods and services that are consumed on a day-to-day basis connect the landlocked country to global trade? Consider this, how crucial is a sea route for a nation without direct coastal access? Here, we are talking about the Czech Republic (Czechia), the heart of central Europe, with a population of over 10 million people. The country is known for its engineering and manufacturing capabilities and strong economic and industrial base with a skilled workforce.

The Czech, government has shown an expression of happiness for going with the initial phase of the Danube-Oder-Sea Canal project this ambitious project connects three rivers (Danube, Oder, and Elbe) with three seas (North Sea, Baltic Sea, and Black Sea)

The development of the canal project, in Czechia, will open the door to connecting Europe and the rest of the world with the sea route, this also opens the door to an untapped market economy of global trade.

The export of Czechia to the world is continuously increasing from $202 Billion in 2018 to $241 Billion in 2022, along with this the trade value of imported goods increased to $235 Billion in 2022 from $184 Billion in 2018. To make it simpler, let’s delve into the data on Export-Import by Czechia to the world.

 

In the year 2022, more than $51 Billion worth of Electrical machinery, and equipment and $37 billion worth of nuclear reactors, boilers etc were traded by Czechia from the world. If we look at the data on imported goods by Czechia then the picture of business growth in a multidimensional way comes to the scene as an opportunity.

 

Once the proposed Danube-Oder-Sea Canal project work is finished then the seamless and efficient maritime route will help businesses to explore the unexplored market potential. The following data on the exchange of commodities shows the trade value between Czechia’s imports from Europe.

 

Czechia’s exports to Europe during and after the pandemic observed a drastic upward movement, for instance, Mineral fuels and oils increased 4 folds from $2.26 billion in 2020 to 8.48 billion in 2022, and electrical machinery and equipment increased from $32.76 in 2020 to $42.33 in 2022. Check the table to know more about it.

 

 

You may ask why the Danube-Oder is important for the overall development of the region. This becomes important because the main transport mode for global trade is ocean shipping and around 90% of traded goods are carried over the waves.

 Let’s discuss the significance and the challenges of the Canal Project-

Enhance connectivity

               ·       This would reduce the cost of transportation and connect Czechia with various regions.

               ·       Make the goods easier to transport in minimum time and cost.

Development of inland waterways

 ·       This project increases not only international trade but also increase domestic trade via inland waterways.

 ·       Encourage domestic business to start business at the international level.  

Competitive advantage

·       Faster movement of goods with low cost.

·       Trade via ship is the most effective mode of transportation.

Interconnected mode of transportation

             ·       The canal system would integrate the entire model of transportation including railway, road and shipping.

Environment-friendly mode of transportation

             ·       Emit lower amounts of carbon and other pollutants than other modes of transportation.

 

Challenges – A barrier in the path of development

Violations of Environmental laws

             ·       The canal project is violating many sections of the environmental laws of the EU and UN.

             ·       Potential threats to marine life and ecosystem.

Lack of support

              ·       The project is struggling to get support from within the country.

              ·       The lack of funding and feasibility of the project alarmed the investor before investing any initial amount.

Overhyped vision

              ·       The project seems to be overhyped by the visionary leaders

 

The economic activity and the development of a region depend upon the cost of transportation, ease of doing business and the connectivity of a country to a global market. In connecting the region for trade, the sea route is the most effective and energy-efficient mode of transportation covering more than 90% of global trade.