It’s been a year since the Suez Canal: What’s changed?

October 11, 20220

On March 23, 2021, a Panamanian-flagged container ship, named Ever Given, 200 feet wide and 1,300 feet long, carrying 18,300 containers, blocked the Suez Canal causing a worldwide shipping crisis. The ship easily took up the width of the canal. It caused a massive marine traffic jam at the world’s most vital shipping route. Ever Given is said to be bigger than the Empire State Building and the Statue of Liberty. The Ever Given was lodged in the canal for six days. It blocked hundreds of ships from traversing the waterways.

Ever Given stuck in the Suez Canal
The Ever Given container ship has been stuck in the Suez Canal since Tuesday 23 March 2021. The ship, which had departed from China on 3 March, is blocking the Suez Canal, a major route between the Red Sea and the Mediterranean.

The Suez Canal is one of the world’s busiest shipping channels for oil and refined fuels, and grains, among other goods, that link East to West. Suez offers more direct routes by providing a shorter routing distance, less time, and lower operating costs to vessels all over. The Suez Canal is an Egyptian waterway corridor that connects Europe and Asia. It is one of the most important and busiest trading routes, operational since 1869. By 2021, approximately 50 ships pass by Suez per day, facilitating about 12% of all global trade. The Ever Given blockage was holding up around $9.6 billion in trade daily. Given based on the volume and value of the goods through the canal.

Cost of Suez Canal Blockage

The Suez Canal Authority (SCA) estimated that Ever Given’s blockage of the Suez Canal cost it up to $15 million per day. It had first asked for $272 million in costs, a $300 million bonus for assisting with the ship’s removal, and an extra $344 million in damages.

Ever Given, along with five other container ships of comparable capacity, blocked more than 300 vessels at both ends of the canal. 24 crude oil tankers and 41 bulk carriers were among them. The affected boats carried approximately 16.9 million tonnes (37 billion pounds) of dead weight. While many stayed put, some docked at nearby ports and anchorages.

The overwhelming salvage operation ended with a clear passage and a restored path.

The aftermath of the Suez Canal Blockage Crisis

Even though the Ever Given accident’s effects have continued to have a significant impact, the marine industry is also dealing with other problems related to shipping canals, particularly as transit costs continue to climb. Let’s see how the repercussions affected the sector and what it portends for future international shipping.

According to Jonathan Roach, a shipping analyst at Braemar ACM Shipbroking, the Ever Given catastrophe affected container services to and from various locations across the world, including the Indian Subcontinent, the Mediterranean, and Northern Europe,

The Suez Canal Authority and the Japanese owners of the vessel are engaged in a financial dispute as a result of the Ever Given event, which has also had an impact on the worldwide supply chain and the nautical sector.

The Panama Canal has caused further difficulties for the sector.

Because of the recent fee increases, long-haul freight and tankers have experienced longer delays

Recovery from the Suez Canal Blockage Crisis

The Suez Canal was freed from the mega container ship blockade after a duration of several days. Many businesses are still focusing on bouncing back from this one. The need to put a contingency plan in place has increased triple-fold. For many companies, the damage done was massive and it took some time for them to get over it, whereas some are still struggling.

There is a loss in sales, shipment delay, loss of products (perishable or otherwise), etc, because of the delay. Companies need to put solid plans in place to get over such situations in the future. The congestion episode may occur at any time in the future until some concrete measures are put in place.

The business needs to prepare itself better. They should be placing the right plans and shifting their focus on the right critical elements. They should also focus on establishing business partnerships, etc

SWL – Your Logistics Partner

As a logistics company, it is our responsibility to take the right actions to ensure the safe and quick delivery of your products. We are motivated by this crisis and are preparing to explore alternative routing options all the while exploring the ways we can use dynamic solutions.

We can better grasp the complexity of global freight networks and spot faults with the help of scenario planning and dynamic simulations. Keeping in mind the vulnerabilities of the route, our team of experts is implementing a holistic and systematic approach to prevent such incidents in the future.

Safe Water Line ensures that you get on-time, safe, and efficient delivery of your cargo, every time.

 

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