The Suez Canal blocked by a huge ship paralyzes the trade of billions

An excavator attempts to free the beached container ship Ever Given, one of the world’s largest container ships, after it ran aground in the Suez Canal, Egypt, on March 25, 2021.

Suez Canal Authority | Reuters

The massive container ship Ever Given has been stuck in the Suez Canal for three days, halting billions of dollars in trade as ships pile up at both ends of the waterway.

More than 150 ships are waiting to pass through the 120-mile canal, according to estimates by research firm StoneX.

Images captured by the MarineTraffic ship tracker show the extent of the accumulation.

A MarineTraffic graph showing maritime traffic stopped around the Suez Canal after the Ever Given ship got stuck in the canal.

Source: MarineTraffic

A MarineTraffic graphic showing that maritime traffic stopped around the Suez Canal after the Ever Given ship got stuck in the canal.

Source: MarineTraffic

The canal handles about 12% of maritime trade, making it an essential crossing point. Each day of lockdown disrupts more than $ 9 billion in assets, according to The Associated Press, citing estimates from Lloyd’s List.

Research firm StoneX noted that 24 of the vessels carry crude, 15 are refined product tankers and 16 are liquefied natural gas / liquefied petroleum gas product carriers.

For ships waiting to pass through the canal, alternative options are limited.

“As delays continue, shippers will have to address the unpleasant decision to make a U-turn and head to the Cape of Good Hope or wait in the Red Sea and the Mediterranean,” said commodity data company Kpler in a note to clientele.

Changing the route significantly increases the duration of a trip, which translates into higher costs. Sailing from the Suez Canal to Amsterdam takes just over 13 days when traveling at 12 knots, compared to 41 days traveling around the Cape of Good Hope in the southern tip of Africa.

The beached container ship Ever Given, one of the largest container ships in the world, is seen after it ran aground, in the Suez Canal, Egypt, on March 25, 2021.

Suez Canal Authority | Reuters

“The event highlights the relative fragility of the maritime trade system, particularly for those flows in which the transits of the Suez Canal represent a higher percentage of the total volumes moved,” the firm added.

The ship was wedged horizontally into the waterway due to strong winds. Several tugs were dispatched to the scene and a Smit Salvage team was called in to help.

“Dredging operations to help refloat the vessel continue. In addition to the dredgers already on site, a specialized suction dredger has arrived on site,” said Bernhard Schulte Shipmanagement, who is the vessel’s technical manager. The firm said an early attempt to refloat the vessel on Thursday was unsuccessful and that another attempt would be made later that day.

The massive cargo hauler is over 1,300 feet long and about 193 feet wide. It weighs more than 200,000 tons. One end of the ship was wedged into one side of the canal and the other extended almost to the other shore.

Nearly 19,000 ships passed through the canal during 2020, averaging 51.5 per day, according to the Suez Canal Authority. The ship was sailing from China to Rotterdam when it ran aground.

Lieutenant General Ossama Rabei, center, head of the Suez Canal Authority, with a team walks along the shore of the Suez Canal where the Ever Given, a Panama-flagged freighter, has jammed through from the Suez Canal and blocks traffic on the vital waterway. An operation is underway to try to free the ship, further jeopardizing global shipping on Thursday, as at least 150 other vessels that needed to pass through the crucial waterway remained idle waiting for the obstruction to clear. .

Suez Canal Authority | AP

Oil prices rose about 6% on Wednesday with West Texas Intermediate crude futures and Brent crude futures posting their best day since November. But by Thursday contracts were back in the red due to demand concerns amid lockdowns in Europe.

The channel lockdown exacerbates supply chains that were already strained amid disruptions caused by Covid-19.

“While it is premature to assess the full impacts that arose from the incident, our channel verifications indicate that in the short term, the lockdown is likely to add to industry supply stresses, which are already hampered by supply necklines. bottle in the supply chain (port congestion and vessel / container shortage) caused by COVID-19, as ocean liners redirect current trips to alternative routes that will result in longer travel times and cause more delays, “wrote JPMorgan in a note to customers.


Source link