Ship Stuck In Suez Canal The Size Of Empire State Is Costing Economy $400 Million Per Hour
The giant ship stuck in Egypt’s Suez Canal is costing the global economy $400 million for every hour it remains there, according to experts.
Ever Given, a ship that is almost the length of the Empire State Building, has been blocking the canal since Tuesday, causing huge delays to normal flows of cargo.
The canal is an artificial waterway that connects Asia and Africa, making it one of the busiest trade routes in the world.
Experts at Lloyd’s List Intelligence have estimated that the block is holding up $400 million worth of goods per hour. The shipping data and news company values the canal’s daily westbound traffic at $5.1 billion while eastbound traffic is valued at around $4.5 billion.
As per the BBC, around 12% of all global trade passes through the canal. As it stands, around 150 vessels are currently waiting to pass on either side of the passage.
Jon Gold, vice president of supply chain and customs policy for the National Retail Federation, told CNBC that the blockage is causing additional challenges on top of delays that are already occurring because of the ongoing pandemic.
‘Every day that the vessel remains wedged across the canal adds delays to normal cargo flows. Many companies continue to struggle with supply chain congestion and delays stemming from the pandemic,’ he said.
He added: ‘There is no doubt the delays will ripple through the supply chain and cause additional challenges.’
Yesterday, authorities made attempts to refloat the 220-tonne vessel. In an update posted last night, March 25, Egyptian offshore and shipping agency Leth said eight tugboats had been employed to assist in moving the boat but had been unsuccessful.
In a post to LinkedIn, CEO of Sea Intelligence Consulting, Lars Jensen said shipping companies should be weighing their options about alternative routes right now.
‘How long do they expect this process to take? If they are optimistic on the timeframe, they should proceed as per normal and just get delayed a few days.’ he said.
If pessimistic shipping companies may divert their ships around Africa on Asia-northern Europe and Asia-US east coast services, Jensen wrote.
However, this alternative routing will take one week longer than the Suez route and burn more fuel.
‘In the pessimistic case, however, there is another effect. The longer the canal is closed, the larger a queue of vessels will be lined up to transit. This can create a backlog meaning that additional waiting times must be anticipated even when the canal does open up again,’ Jensen wrote.
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