Suez Canal blocked by Taiwanese vessel Evergreen Marine. A cargo ship called Ever Given, long 400 meters and a width 59 m, ran aground, with our noses on the shore. This became the reason for a complete stop of traffic in the water overpass., connecting the Red and Mediterranean seas. Egyptian authorities report, that the removal of the obstacle can take a long time.
What is the risk of stopping transit in one of the world's most popular shipping channels, connecting Asia and Europe, - dealt with the international edition of the Federal News Agency.
Suez incident
Suez Canal Office (SCA) reported, that the reason for the incident was bad weather. Unfavorable cyclone captured the entire region and contributed to major disturbances at sea (in Syria, eg, due to storms, all ports in the provinces of Tartus and Latakia were closed), as well as powerful dust storms in desert areas, which also affected Egypt.
Evergreen Marine's ship sailing from China to the Netherlands ran aground at the 101st kilometer of the canal, blocking it diagonally. It happened yet 23 Martha, at 18:30 Greenwich (15:30 by Moscow time).
Russian satellite from space photographed the blocked Suez Canal:https://t.co/Nt3ecjCnBq
© Photo: Dmitry Rogozin, Telegram pic.twitter.com/v6HoARYxUI
- zvezdanews (@zvezdanews) March 25, 2021
The front of the Ever Given is about 5 meters stuck in one of the "walls" of the channel. Workers are still trying to deepen the shore, so that the container ship can be towed.
In the hope, that the obstacle to shipping will soon be removed, The SCA first allowed several ships to enter the channel, however, later it was forced to temporarily suspend traffic.
Dozens of ships, including other large container ships, oil and gas tankers, bulkers, including transporting products, stand on both sides of the canal, which creates one of the worst traffic congestion in recent years in this maritime region.
“We do not exclude, that it might take weeks, depending on the situation", - said Peter Berdowski, CEO of the Dutch company Boskalis, freeing the ship.
Over the past day, the ship's GPS signal shows only minor changes in its position..
Eight towing and rescue boats are involved at the scene, as well as several continuously operating excavators.
It is not excluded, that in order to free the channel, the vessel will have to be freed from cargo, what SCA hopes to avoid. It is this procedure that can lengthen the period of elimination of the accident up to two weeks.
Reaction on the web
Social media users found a reason to show their wit in the incident.
The Suez Canal right now – Live Feed!#SuezCanal #Suez #Live pic.twitter.com/Tl1cxsp39L
- Avi Barel (@4Barel) March 26, 2021
The web reminds, that shortly before the accident at sea, a container ship drew a symbol, whose outlines have a "recognizable shape" - this could be traced through the program, showing the routes of ships. The ship's operator said, that it was pure coincidence.
Currently, more and more memes on the topic of a stuck container ship began to appear on the Internet..
Traders, on the other hand, do not laugh at the current situation.. The incident is fraught with serious economic consequences for many countries of the world. If you do not quickly cope with the removal of the obstacle, disruptions in world trade cannot be avoided.
Effects
If the congestion is not cleared up in the coming days, shipping companies will be forced to reroute ships around the southern edge of Africa, past the Cape of Good Hope, which will add to the route about 5 thousand nautical miles. Delivery time will increase by more than a week.
At the same time, for a bypass route for fuel for tankers, transporting oil from the Middle East to Europe, will need to spend about 300 one thousand dollars.
Suez incident will certainly exacerbate Europe's logistical problems. company, relying on a steady flow of imports from Asia, find themselves in a particularly difficult position.
The problem is compounded by the fact, that every day container ships have to wait. Ships, arriving several days late, cannot be emptied and overloaded in time for the planned return flight. This leads to, that trips are canceled.
Besides, carriers will face an increase in freight rates and a shortage of containers - companies will not be able to send their ships to other destinations due to a lack of containers for cargo.
"Delays, likely, increase costs, increasing the already widespread inflationary pressures on supply chains ", - said Chris Rogers, Lead Trade Analyst at S&P Global Market Intelligence Panjiva.
The expert is confident, that the ripple effect caused by congestion could lead to a shortage of consumer goods.
Transit volumes
Every day, the 193-kilometer Suez Canal passes about 50 cargo ships. They transport about 30% global volume of shipping containers, loads in which are about 12% all world trade.
The movement is carried out in two directions. In the eastern direction, goods are transported in the amount of 4,5 billion, and in the west - about 5,5 billion.
Prices are rising
According to Bloomberg, now the prices for sea transportation have already jumped. VLCC class oil tanker shipments from the Middle East to China increased to 1371 dollar a day. At the same time, prices increased, including on routes, outside the channel.
Cost of transportation of one 40-foot sea container from China to Europe, in its turn, rose almost to 8 thousand. dollars. This 4 times more, than last year.
The use of Suezmax tankers - the largest of those capable of sailing along the canal - now costs about 17 thousand. dollars a day. This is considered the highest price indicator since the summer. 2020 of the year. These vessels usually transport up to a million barrels of oil through the canal in just one day..
If the situation does not improve soon and it becomes clear, that the congestion will be long lasting, prices can jump even more.
official freight indices aren’t showing it yet but internal rates to ship from Asia to Europe on two Evergreen vessels have doubled. https://t.co/iUFuXYKG05
- Michelle Wiese Bockmann (@Michellewb_) March 26, 2021
Impact on oil
Suez Canal Incident Stopped Tankers, transporting oil. In total, they are now idle in the "traffic jam" 870 thousand. tons of crude oil and 670 thousand. tons of pure petroleum products (gasoline, NAFTA, diesel fuel).
Mostly this route is used by tankers with oil from Russia., Saudi Arabia and Iran, following to India, China and South Korea.
Channel closure influenced the oil price. The very next day after the accident, 24 Martha, the cost of Brent brand on the London ICE stock exchange increased to 62,7 dollars per barrel (on 3%). As of 26 in March, the growth was already 3,86%, so the cost went up to 64,36 dollar.
The Ever Given Vessel is still grounded and the Suez Canal remains blocked. This is causing huge delays and there are suggestions that oil prices will spike due to the congestion the grounding has caused. ABC News https://t.co/WNJXegMFHz
— WTA (@WTALogistics) March 25, 2021
Not the first time
In the entire history of the Suez Canal, it has been blocked several times.. During the Suez Crisis (1956–1957) the waterway was partially destroyed and closed. During the Arab-Israeli wars, from 1967 by 1975 year, traffic was blocked too.
Accidents in this place are common. In October 2017 Japanese container ship OOCL ran aground, and 2018 - ship Al Muraykh, and the history of incidents in the channel is not limited to this. However, it usually takes only a few hours to fix such problems..
The longest of the "emergency" overlaps was previously recorded in 2004 year. Then the tanker Tropic Brilliance ran aground, traffic was blocked for two days.
The problem is that, that the Suez Canal itself is not adapted for the maneuvers of large vessels with low draft. They can move along it clearly in the middle., and any slight deviation from the course leads to an accident.
“We sincerely apologize for, what caused serious trouble to the courts, which were supposed to take place in the area, as well as all topics, who is involved in navigating the Suez Canal ", - noted on the Evergreen Marine website.
It will be possible to sum up the incident and calculate the damage incurred by traders only after the waterway between the Mediterranean and the Red Seas is cleared.. In any case, this will affect consumers as well.: at least fans of today's popular online shopping in China will have to wait.
Author: Victor Voronov
