Ever Given in the Suez Canal: congestion in the Mediterranean and Red Seas worsens, economic losses are growing.

source: bbc

Around the 400-meter container ship "Ever Given", which ran aground in the Suez Canal and blocked the way for other ships, began to deepen the bottom. Another attempt made on Friday to remove the container ship from the aground failed.

The Suez Canal blockage by a giant container ship has created significant congestion in the Red Sea, and the number of ships waiting to enter the canal is growing every day.

"This will affect shipping schedules around the world," warns Maersk Ohio chief engineer Joe Reynolds.

On Friday, the Egyptian presidential adviser expressed the hope that the situation will be resolved within two to three days. Experts say that if the ship cannot be moved from its place without resorting to complete unloading, it could take weeks to solve it.

Loss of world trade

The Suez Canal is one of the most sought-after trade routes in the world. About 12% of the world's trade passes through it. 

  • How the Ever Given container ship, which blocked the Suez Canal, is pulled out
  • A giant ship ran aground in the Suez Canal. A traffic jam formed from dozens of ships

According to Leth Agencies, 237 vessels were waiting for their turn on Friday to pass through the canal: 107 in the Port of Suez in the Red Sea, 41 in the middle of the canal, and another 89 in Port Said in the Mediterranean.

Every hour of downtime for ships costs astronomical sums. According to Lloyd's List, blocking the channel delays nearly $ 9.6 billion in goods a day, or $ 400 million an hour, per day.

The situation could seriously affect supply chains worldwide, warns International Chamber of Shipping Secretary-General Guy Platten, and compensation for unforeseen costs will ultimately fall on consumers' shoulders.

We are receiving reports that shipping companies have started rerouting their ships around the Cape of Good Hope in southern Africa. That's an additional 5,600 kilometers and an extra 12 days of travel," Platten says.

The world's largest shipping companies Maersk and Hapag-Lloyd, are now exploring the possibility of re-routing their vessels.

The first container ship to take a detour across the Cape of Good Hope was the sister ship Ever Given, the Ever Grit. Both are operated by the Taiwanese firm Evergreen Marine.

The Russian Ministry of Industry and Trade cannot yet assess the impact of the situation with the Suez Canal's closure on the supply of imported goods to Russia and their prices.

"We did not assess what actually happened, so I cannot answer this question now," the head of the ministry, Denis Manturov, answered this question to journalists in Krasnodar on Friday.

The oil market is reacting.

Problems in the Suez Canal on Friday forced oil prices to rise again. After a three-week fall due to loss of demand due to new lockdowns in Europe, prices rose by 2%.

Of the 39.2 million barrels of crude oil transported per day by the sea in 2020, 1.74 million passes through the Suez Canal, according to Kpler, which tracks tankers.

This week, prices for the transportation of oil products by sea have almost doubled, and the Suez Canal congestion was one of the reasons.

Oil markets were also affected by the escalation of Yemen's conflict, where militants attacked the refineries of Saudi Arabia's state-owned company Aramco and its military installations.

OPEC is also expected to support oil prices by keeping production low.

A big problem

The container ship Ever Given blocked the Suez Canal on 23 March. According to the ship captain, he was blown off course by a powerful gust of wind.

This is the largest vessel that has ever experienced problems in the waters of Egypt. Its dimensions are 59 by 400 meters (this is the length of four football fields). Tugs and rescue boats managed to turn the vessel along the coast, but this is not enough to resume navigation.

The last time a similar incident in the Suez Canal occurred in 2017 when a Japanese container ship ran aground due to technical malfunctions. Then the Egyptians managed to resume navigation in the strait in just a few hours.