It's Not Just Hormuz: The Chokepoints Changing Global Shipping Forever with Sal Mercogliano

**Sal Mercogliano** (0:00)
Today, we're moving over 12 billion tons of cargo, and we do it at a volume and velocity unlike ever before. If you look at the map showing you where ships are moving around the world, it's like the circulatory system of trade. When you have an incident, it's like being in a car wreck at five miles an hour versus 80 miles an hour, particularly when they happen in these key, what we call choke points. And when you pinch off the Persian Gulf or you pinch off the Bab el-Mandab, or if you choke off the Black Sea, it's like putting a clamp on the femoral artery of your leg. If you leave it on there for too long, you're going to damage it. And that's kind of what we're seeing with these impacts on shipping right now. Maybe this correction will force people to kind of change the way they do business and consume.

**Nate Hagens** (0:46)
You're listening to The Great Simplification. I'm Nate Hagens. On this show, we describe how energy, the economy, the environment and human behavior all fit together, and what it might mean for our future. By sharing insights from global thinkers, we hope to inform and inspire more humans to play emergent roles in the coming Great Simplification.
Today, I'm welcoming shipping expert and military historian, Sal Mercogliano, for a deep dive on the subject of shipping, especially through the lens of increasing pressure on key bottlenecks and choke points, both in the Strait of Hormuz and beyond. Sal is an Associate Professor of History at Campbell University in North Carolina, an Adjunct Professor at the US. Merchant Marine Academy. He is also the host of the popular podcast, What's Going On With Shipping. Sal holds a Merchant Marine Deck Officer License, as well as a Master's in Maritime History and Nautical Archaeology from East Carolina University, and a Ph.D. in Military and Naval History from the University of Alabama. In this episode, Sal gives what might be considered a brief 101 course on maritime trade, including how the role of choke points and militaries have evolved over the last century, the surprising influence of insurance, and what the future of international trade might look like in an increasingly fractured world. While this episode might on the surface seem slightly disparate from this channel's usual topics, I think you will quickly surmise and see the relevance of Sal's expertise for understanding where our hypercomplex, interconnected global system is headed. Before we begin, if you enjoy this podcast, one of the biggest ways you can support us is by subscribing to it on your favorite platform, be it YouTube or Spotify or iTunes or wherever. We believe in making this content free and accessible to as many people as possible, so we appreciate your support. With that, please welcome Sal Mercogliano.
Welcome to the program, Sal.

**Sal Mercogliano** (3:15)
Thanks for having me, Nate.

**Nate Hagens** (3:16)
Thank you for coming on Short Notice. I have invited you on because you are an expert on a subject that I've long been interested in. That has become especially relevant amidst world events the last few months, which is shipping, trade, transportation.
So to begin, I want to ask you a question very relevant to the current situation in the Strait of Hormuz.
I will timestamp this moment. It is 1237 Central Time on June 29th. We've heard a lot about the US or Iran or other parties controlling the ships passage. But who really owns the Strait of Hormuz? And how is this being tested in current events?

**Sal Mercogliano** (4:01)
Well, Nate, thanks for having me. That question is one I've been dealing with now for 17 weeks since this all started back in February 28th. Technically, I mean, territorial waters reach out 12 nautical miles from shore. And since the strait is 21 miles wide, I mean, it's kind of owned by Iran and Oman, kind of split down the middle. However, there is an international treaty which builds upon previous international treaties that reserve the right of what's called transit passage. So the UN Convention of the Law of the Sea, UNCLOS, it's its nickname, basically specifies that ships traveling into other countries have the right to transit through territorial waters if they're doing it for the purpose of commerce. So if you're Bahrain, an island in the middle of the Persian Gulf, you can't be prohibited from getting out into the ocean. So under UNCLOS, you should be able to do it. Now, I will note that there's a couple of caveats to this, not the least of which is that Iran is not a signatory to UNCLOS, and by the way, neither is the United States, kind of two of the big ones that don't belong to this international treaty. But the issue right now is really a fight for Iranian control over the Strait of Hormuz. What they really want to do is exert their ability to permit and not permit ships to come in. They've created this entity called the Persian Gulf Strait Authority, which gives them kind of the air of legitimacy, which it really isn't. But they're trying to control that trade, and that is where we find ourselves right now. The Strait of Hormuz itself, the center part has been mined. We know that because the Iranians have said it, the US have said it.