Suez Blockage Puts World’s Supply Chain at Risk

There’s no denying that the Suez Canal is the world’s most important waterway. The reason: about 12% of the global trade flowing through a single canal, one connecting two continents – Asia and Europe. The canal is so strategic that world powers have fought over the waterway since it was completed in 1869.

During WWII, one of the main factors which ensured Allied victory was the ability of their troops to keep the supply chain flowing by controlling the Suez, which was constantly under Axis shelling.

A One of a Kind Accident

As FleetMon reported on the grounding of Ultra Large Container Vessel EVER GIVEN on Mar 23, authorities have been constantly trying to use tugs and diggers to dislodge the massive 400m long container ship, but to no avail. This is increasing the chances of a prolonged delay in the global supply chain, which can amplify the woes of commoners around the world.

Watch a 3D video simulation of the last 90 minutes of container ship EVER GIVEN’s journey before the accident happened. The video is based on AIS vessel position data received by FleetMon.

Assisting to Re-float the Ship

On Thursday, work to re-float the EVER GIVEN has been rigorously restarted, with tugs and diggers having so far failed to budge the vessel. Traffic along the waterway was temporarily suspended on Thursday as well. Industry experts commented that the drama could well unfold for 5 or 6 days.

Here’s a list of the tug boats assisting in re-floating the grounded container ship – with no success:

• Salam7
• Ezzat Adel
• Svitzer Port Said 1
• Svitzer Port Said 2
• Tahia MISR 1
• Tahia MISR 2
• Mosaed 2
• Mosaed 3
• Mosaheb 2
• Capo Gee
• Baraka1
• A BahGat

Challenges to the Salvage

SMIT Salvage BV, a legendary Dutch firm specializing in salvage operations has undertaken the especially hard task of salvaging the grounded container ship. Employees of SMIT Salvage BV can be seen parachuting themselves from one ship wreckage to the next in an effort to save ships, seldom during violent storms.

According to people familiar with the matter, Japan’s Nippon Salvage has also been employed to boost the re-floating process.

Rockford Weitz, director of the Fletcher Maritime Studies Program at Tufts University said, “Dislodging a grounded ultra-large container ship in the Suez Canal will be challenging due to the confined nature of the canal’s shipping channel. This presents additional complications in comparison to a grounding on a reef or shoal.”

With its twisted starboard, the ship may be connecting continents, but it has halted a trade worth $9.6 billion every day, as per estimates from Llyod’s List which used a back-of-the-envelope calculation to come to the number. The industry journal concedes that these are “rough calculations,” however.

The Suez Canal Authority has repeatedly refused to comment on the work or given any indication as to when ships could resume traffic in the vital canal.

Nick Sloane, the salvage master responsible for refloating the Costa Concordia, the cruise ship that capsized on the coast of Italy in 2012 said that it’s safe to say that the best chance for freeing the ship may not come until Sunday or Monday when the tide will reach a peak.

Greg Knowler, the European editor at JOC Group, which is part of IHS Markit Ltd, said, “The Suez Canal blockage comes at a particularly unhelpful time. Even a two-day delay would further add to the supply chain disruption slowing the delivery of cargo to businesses across the U.K. and Europe.”

Maritime Traffic Jam Is Increasing

Monitoring the scene with our Live-Tracking Tool FleetMon Explorer, 280 vessels, mostly bulk carriers, container ships, and oil or chemical tankers, are waiting to cross the canal. The number of moored vessels in front of the Suez Canal is increasing. On Wednesday it had been 150 ships waiting to enter the Canal. Today over 300 vessels, mostly bulk carriers, container ships, and oil or chemical tankers, are waiting to cross the canal.

Usually around 50 vessels transit the Suez Canal each day. Our AIS tracking tools showed that each day 50 additional vessels arrive at the entries of the Suez Canal.This means that each day of delayed transits would need another day to make up for the delay. Changing the route to bypass the Suez Canal would mean more than 10,000 extra kilometers and an additional two to three weeks to reach the final destination, not to mention the extra tons of GHG emissions.

This highlights a major risk factor in the global supply chain: the existence of maritime chokepoints. Similar other chokepoints exist in the Suez, Panama Canal, the Strait of Hormuz, and Southeast Asia’s Malacca Strait.

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