Dozens of vessels get stuck as a massive container ship blocks Egypt’s Suez Canal. Consequently, the Egyptian government opens canal’s older channel to divert traffic for now.
Suez Canal- The Shortest Sea Link Between Asia and Europe
The Suez Canal, connecting the Mediterranean to the Red Sea, is the shortest link between Asia and Europe. It extends 120 miles (193 km) between Port Said in the north and Suez in the south and facilitates around 12% of the global trade.
Ever Given, A Panama-registered container ship is 400-m long and 59-m wide and weighs 2 lakh tonnes. The vessel was hit by a sudden strong wind on Tuesday morning and hit bottom. However, no crew members were injured during the mishap. It was on its way to Rotterdam in the Netherlands from China.
Sources revealed that 30 ships are blocked to the north of the Ever Given, and three to the south.
Loss Due to Blockage
Given the massive trade through the Suez Canal, even a daylong blockage will severely impact global trade. According to SCA data, around 51 ships passed per day through the canal in 2020. In total, 19000 vessels passed through the channel last year. Though there is an alternative route around the Cape of Good Hope around Africa, it is a week slower than the Suez route.
Kpler, energy intelligence service, revealed that the jam affected more than 20 oil tankers carrying crude oil. Subsequently, international oil prices witnessed a jump of 4% owing to fear of blockage of oil shipments. Moreover, brokers have seen an increase in a bid for space on the pipelines by oil companies that completely bypass the waterway.
Such disruptions are evidence of ships getting bigger and waterways getting more congested.
In all, though Suez Canal Authority is trying everything to refloat Ever Given, it may take several days to make it fully operational again. Long delay can create severe problems for shippers.