Suez Canal blockage: a major issue for trade

Written by Demetris Nicolaides
26 March, 2021

It could take several weeks to get the enormous 20,000 TEU Japanese owned containership from where it is jammed after running aground on 23 March 2021. MV Ever Given has reportedly lost steering control after strong gust of winds knocked it off course and hit the eastern bank of Suez Canal. The Suez Canal is completely blocked, and no vessels can now pass through this major artery which provides the quickest link between Europe and Asia. According to Bernhard Schulte Shipmanagement, the technical manager of Ever Given, there were no casualties pollution or cardo damage reported.

Source: NY Times satellite image by CNES, via Airbus By Scott Reinhard

The blockage of the Suez Canal is causing a major disruption in trading as the canal handles around 12% of global sea borne trade, which is equivalent to US$9 billion per day or US$400million an hour is one of the major chokepoints of the world.

Efforts to re-float the vessel started immediately however “After 48 hours of proactive efforts to re-float Ever Given, the time-chartered vessel’s grounding situation has not been resolved” Evergreen’s latest statement reveals. “It is like an enormous, beached whale. It’s an enormous weight on the sand,” Peter Berdowski (CEO of Boskalis appointed salvage experts) told the Dutch TV station NPO. After several attempts even at high tide points were unsuccessful the next attempts are expected to take place after the unloading of containers to lighten the ships weight.

Every Given seen from tug deck. Credit Suez Canal Authority
Efforts by tugs brought to the scene to pull push the container vessel free – Source: Suez Canal Authority

Shipowners will have to weigh in their options and decide on whether rerouting their vessels around Cape of Good Hope, which adds an additional 7-10 days to the trip, is the better choice.

While the world watches on the release of Ever Given, shipowners and managers are pondering on contingency plans for their vessels. In both ends of the Suez Canal, this has created a huge bottleneck and more than 200 vessels have reportedly dropped anchor and await further instructions while more vessels are closing in.

Source: Marine Traffic

Even after Ever Given is released, it could take days before the queue clears up. According to the World Shipping Council, the Suez Canal has a throughput of 106 vessels per day so there is already a minimum 2-day delay, and this is increasing each day.

If there is something that we can take away from this incident is that vessels have become too big to “fail”. Some experts in the field are bringing into question the enormous size of these vessels. Have we reached, or perhaps crossed, a reasonable safe limit size? And should such large vessels be allowed to pass through the Suez Canal or other similar passages for that matter? The size of Ever Given vs the narrowness of the canal certainly appears to be an issue this time but there are millions of other factors to consider. It will be very interesting to see where such discussions lead us and what kind of impact it may have on the shipping sector in general.

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