For six days, the global business community wrung its hands over the blockage of the Suez Canal by the cargo vessel Ever Given. High winds wedged the Japanese-owned, Taiwanese-operated Evergreen Marine ship against the shore of the canal. At 1,312 feet long and capable of transporting 20,000 containers, the massive ship halted all canal traffic. According to the shipping publication Lloyd’s List, normally $9.6 billion worth of goods pass through the canal each day. Although the Dutch salvage company Boskalis reported that the ship was freed on March 29, the shipping backlog created by the six-day standstill will continue to cost businesses for weeks and even months to come.
Prolonged Supply Chain Disruption
Retailers, manufacturers, oil refineries, and supermarkets will continue to wait for goods as ships slowly begin moving through the canal again albeit badly behind schedule. Some companies rerouted ships around Africa instead of waiting at the canal. This choice adds at least eight days to transit times. The results will be assembly-line stoppages as companies wait for supplies and retailers wait for new inventory. A professor at Northwestern University said that the many businesses impacted by the delays will need at least 60 days before their operations return to normal.
More Shipping Price Increases
Delayed shipping vessels will worsen the congestion plaguing ports around the world. Cargo vessels arriving late at ports mean that goods that had been scheduled to ship out will have to wait longer for incoming containers to be unloaded and refilled. A representative from the Peterson Institute for International Economics said that the slowdowns at ports will drive up costs at all levels, including for consumers.
A shortage of containers for Asian goods had already troubled world trade. Even before the canal blockage, companies had been shipping containers between Asia and Europe at triple the cost compared to a year ago.
The dramatic blockage of the Suez Canal highlighted the delicacy of global supply chains designed around just-in-time deliveries. Has the Suez Canal blockage impacted your company?
ABOUT Evergreen Maine Corp.
Since its establishment by Dr Yung-Fa Chang on 1 September 1968, EVERGREEN MARINE CORPORATION (TAIWAN) LTD. (EMC) has secured its place in shipping history. Since those early days, it has not only survived, but positively thrived on hard work and perseverance, until today it boasts a fleet of over 160 container vessels. Both in terms of the magnitude of its fleet and its cargo loading capacity, EMC ranks among the world’s leading international shipping companies.
But it was not built overnight. In 1975 when the energy crisis hit the world and the shipping industry slumped, EMC had innovative yet practical ideas about how to shape the future and it boldly launched its containership project. With a newly-built fleet of containerships, it started a full container service for the routes linking the Far East with the US West Coast. EMC’s fleet of containerships was the first such fleet for Taiwan.
ABOUT Boskalis
With its roots in the Netherlands, Boskalis has over 100 years of experience in hydraulic engineering, coastal protection and land reclamation. Our head office is located in Papendrecht and we have an extensive network of branches around the world. We operate in 90 countries and across six continents, with a versatile fleet of more than 700 vessels and floating equipment. Shares in the company have been listed on Euronext Amsterdam since 1971.
Traditionally, dredging has been Boskalis’ core activity. Our services include the construction and maintenance of ports and waterways, land reclamation, coastal defense and riverbank protection.
Today we also offer a wide variety of maritime services and contracting to the offshore energy sector.
ABOUT Northwestern University
Northwestern is a comprehensive research university that is deeply interdisciplinary across multiple schools and units. Our rigorous yet empathetic academic environment provides a robust mixture of theory and practice, with an emphasis on top-tier research, new knowledge, creative expression and practical application. If you are at Northwestern, you are part of an innovative, collaborative, and multidimensional community delivering an impact that is rare in higher education.
Northwestern is a leading research university that is home to more than 90 school-based centers and more than 50 University research centers. With an interdisciplinary culture, our research spans a spectrum of areas including neuroscience, nanotechnology, biotechnology and drug discovery.
ABOUT Peterson Institute for International Economics
The Peterson Institute for International Economics (PIIE) is an independent nonprofit, nonpartisan research organization dedicated to strengthening prosperity and human welfare in the global economy through expert analysis and practical policy solutions.
The Institute is committed to rigorous, intellectually open, and in-depth study and discussion. It attempts to anticipate emerging issues and present ideas in useful, accessible formats, to inform and shape public debate. Its audience includes government officials and legislators, business and labor leaders, management and staff at international organizations, university-based scholars and their students, experts at other research institutions and non-governmental organizations, the media, and the public at large.
Article Sources:
https://www.usnews.com/news/business/articles/2021-03-29/suez-canal-blockage-adds-to-pressure-points-in-global-trade
https://www.bbc.com/news/business-56559073
https://www.cnbc.com/2021/03/29/suez-canal-is-moving-but-the-supply-chain-impact-could-last-months.html
