Suez Canal / Ever Given UpdateEverstream Team
The Ever Given has finally been freed in the Suez Canal, but the recovery has only just begun; the downstream effects are and will be far reaching. This report serves as an update to our initial report on this event and the impacts that will be felt for weeks and in some cases months.
The container ship has been freed from the shoreline around 15:00 local time, with its course corrected by around 80 percent, according to authorities. Further efforts to move the ship will reportedly resume later in the day on March 29. Traffic will be able to resume once the ship is relocated to a waiting area in a wider section of the canal. A total of 367 vessels are still waiting to pass through, while countless others have already made the decision to divert course around the southern tip of Africa, an alternative voyage that reportedly adds weeks to the journey and costs upwards of USD 26,000 per day in fuel costs. Authorities estimate that clearing the traffic jam of container vessels will take roughly three and a half days and will cost nearly USD 10 billion in lost trade each day. The Canal, which is one of the world’s major maritime trading routes, is vital for the movement of oil and liquefied natural gas as well as many other of the goods consumed around the world. Sources report that tankers carrying a combined 9.8 million barrels of crude oil – about one tenth of daily global consumption – eagerly await permission to pass through the canal.
While efforts to normalize canal operations are underway, there are several reverberating impacts that can be expected from the week-long ordeal. First, air and rail cargo rates out of Asia to Europe are likely to rise again as shippers seek to use alternative modes of transportation, with still limited capacity. Next, container lines have started to implement booking stops for the first two weeks of April due to the uncertainty of when ships will make it through the Suez Canal, pushing more shippers to alternative modes of transport such as air and rail. Last, already congested ports in Europe – such as Antwerp, Rotterdam, and Felixstowe – could face long delays due to the simultaneous arrival of vessels. As ships are likely to be diverted to alternative ports to gain time with the unloading process, further delays of import and export cargo can be expected. Those with shipments and goods that are stuck on vessels waiting at Suez or diverting around of the Cape of Good Hope can send critical material via air, rail or truck out of Asia to Europe where possible and necessary. Alternatively, containers that are already on their way out of Asia can be unloaded at large transshipment ports from where they can be flown via air through hubs such as Singapore or Dubai. If possible, critical materials should be sourced from a different supplier or geographical region until the disruptions have subsided. Authorities estimate that the shutdown of the canal has impacted as much as 15 percent of the world’s container shipping capacity. As such, reversing such impacts will take some time and require strategic adjustments be made by those operating in maritime freight.