Global Shipping is Not a Given with Recent Canal Blockage

While it appears to be freed as of this morning, Ever Given, the giant cargo ship recently wedged in Egypt’s Suez Canal, resulted in a traffic jam of more than 300 ships with more than 300 ships on the way to the waterway during the next two weeks. Some vessels could still change course, but the crush of ships listing the destination of Suez Canal shows that an even-greater backlog looms for shippers already under pressure amid the coronavirus pandemic.

And, losses to global shipping are mounting. The blockage delayed an estimated $400 million an hour in goods. The closure wreaked havoc with shipments around the world as container vessels sat off of ports in various cities such as Houston, San Francisco and Los Angeles.

The closure could also affect oil and gas shipments to Europe from the Mideast, which rely on the canal to avoid sailing around Africa. The price of international benchmark Brent crude stood at more than $61 a barrel last Thursday.

The quarter-mile-long vessel carrying cargo between Asia and Europe got sideways early last week in the narrow man-made canal dividing continental Africa from the Sinai Peninsula. Taiwan-based Evergreen Line, the time charterer of the vessel, said the Ever Given “was grounded accidentally after deviating from its course due to suspected sudden strong wind.” The Suez Canal Authority said a lack of visibility in adverse weather led to the ship losing control and drifting.