A large container ship has disrupted traffic on the Suez Canal – a shipping route between Europe and Asia – bringing shipping activities on that route to a standstill.
The Suez Canal is one of the world’s major shipping routes, with players in the shipping business worried that the blockage would affect imports and exports.
According to Lloyd’s List, an estimated $10 billion of daily marine traffic could be affected by the blockage.
The canal serves as a route for the transportation of oil and liquified natural gas from the Middle East to Europe, as explained by the Global Head of Marine Risk Consulting, Captain Rahul Khanna, of Allianz Global Corporate & Specialty (AGCS).
Khanna noted that over the past 5 decades, container-carrying capacity on ships has grown by 1,500 percent, adding that that figure has “doubled over the past decade and a 224,000-tonne, 400-metre-long vessel which can carry up to 20,000 containers like the MS Ever Given is in the top 1 percent in terms of size of vessels on the ocean.
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“For some time now many in the salvage industry have warned that container ships are getting too big for situations like this to be resolved efficiently and economically.”
Explaining how the container ship blocking the Suez Canal would be dislodged, to allow for a free flow of ship traffic, Khanna said, “Dislodging a “mega ship” in a confined space like the Suez Canal will be challenging, requiring the expertise of a specialist salvage company – not all have the experience of dealing with such vessels.
“Their first job is to assess the degree to which the vessel is aground, and what could be the safest and quickest way to refloat the ship.”
Pointing out other possible shipping routes, Khanna noted that “The option of going around the Cape of Good Hope (COGH) – an area on the Atlantic coast of the Cape Peninsula in South Africa – is always available although it adds around 5,000 nautical miles or 9,000 kilometers to a typical journey from the Middle East to Europe.
“This means a lot more fuel consumption and a much longer journey time (around 10 to 15 days more depending upon the speed of the vessel).”
Effects On Global Supply Chains
Khanna noted that the impact of the blockage was immediately felt and that it was reflective of the dependence of global trade on mega ships.
He noted that 10-12 percent of global trade passes “through the Suez Canal with more than 50 vessels transiting it a day.”
