A massive ship blocking the Suez Canal brings billions in trade to a standstill

A dredger tries to free the stranded container ship Ever Given, one of the largest container ships in the world, after it ran aground on March 25, 2021 in Egypt’s Suez Canal.

Suez Canal Authority | Reuters

The massive container ship Ever Given has been stuck in the Suez Canal for three days, stopping billion-dollar trade as ships pile up on both sides of the waterway.

According to estimates by the research company StoneX, there are currently more than 150 ships waiting to pass through the 120-mile-long artificial canal.

Pictures taken by the ship tracking device MarineTraffic show the extent of the superstructure.

A graphic from MarineTraffic shows that shipping around the Suez Canal was stopped after the Ever Given ship was trapped in the canal.

Source: MarineTraffic

A graphic from MarineTraffic shows that shipping around the Suez Canal was stopped after the Ever Given ship was trapped in the canal.

Source: MarineTraffic

The canal handles around 12% of maritime trade and is therefore an essential transit point. Every additional day the ship is delayed disrupts more than $ 9 billion worth of goods, the Associated Press said, citing estimates by Lloyd’s List.

Research firm StoneX found that 24 of the ships are carrying crude oil, 15 are tankers for refined products, and 16 are carriers of liquefied natural gas / liquefied gas products.

Alternative options are limited for ships waiting to cross the canal.

“Given the ongoing delays, shippers have to make the uncomfortable decision of whether to turn around and head to the Cape of Good Hope or wait in the Red Sea and the Mediterranean,” the commodity data company Kpler wrote in a note to customers.

The rerouting increases the length of a trip significantly, resulting in higher costs. Sailing from the Suez Canal to Amsterdam takes just over 13 days when traveling at 12 knots compared to 41 days when traveling around the Cape of Good Hope.

The stranded container ship Ever Given, one of the largest container ships in the world, ran aground in the Suez Canal in Egypt on March 25, 2021.

Suez Canal Authority | Reuters

“The event highlights the relative fragility of the on-water trading system, particularly for those flows for which Suez Canal transits represent a higher percentage of the total volume moved,” added the company.

The ship was jammed horizontally in the waterway after strong winds. Several tugs were sent to the scene and a team from Smit Salvage was brought in to assist with the operation.

“The dredging work to support the floatation of the ship will continue. In addition to the dredgers already on site, a specialized suction dredger has arrived on site,” said Bernhard Schulte Shipmanagement, the ship’s technical director, in a statement. The company said an early attempt to float the ship again on Thursday was unsuccessful and another attempt would be made later that day.

The enormous carrier is over 1,300 feet long and approximately 193 feet wide. It weighs more than 200,000 tons. One end of the ship was wedged into one side of the canal, the other stretching almost to the other bank.

According to the Suez Canal Authority, almost 19,000 ships passed the canal in 2020, an average of 51.5 per day. 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 walk along the banks of the Suez Canal, where the Ever Given, a cargo ship flying the Panama flag, was jammed across the Suez Canal, blocking traffic on the vital waterway. An operation is underway to try to free the ship, which further threatened global shipping Thursday as at least 150 other ships had to idle through the crucial waterway waiting for the obstruction to be removed.

Suez Canal Authority | AP

Oil prices rose about 6% on Wednesday, with both West Texas Intermediate crude oil futures and Brent crude oil futures recording their best days since November. But contracts were back in the red on Thursday and demand concerns outweighed the lockdowns in Europe.

The blockade of the channel further exacerbates supply chains, which were already strained due to the disruptions caused by Covid-19.

“While it is premature to fully assess the full impact of the incident, our sewer reviews suggest, in the short term, that the blockage is likely to add to the industry’s supply stresses already caused by ongoing supply chain bottlenecks (congestion in ports and ships / ) are hindered. ” Container bottlenecks) caused by COVID-19 as liners reroute current trips to alternative routes, resulting in longer journey times and further delays, “JPMorgan wrote in a notice to customers.

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