The Ocean Container Rate Crisis - Part 3/3

Suez Canal Blockage: Top 3 Things You Need to Know 

What is the current situation?

The vessel “Ever Given” hit the wall of the Suez canal at full speed and high tide, causing it to be solidly grounded, with the bow rammed into the embarkment and the rear also logged against the canal wall. The Suez canal is completely blocked until the ship is freed.

Initial efforts to pull the “Ever Given” free with tugs failed and operations now are focused on removing fuel to lighten the ship and on dredging around it in an effort to refloat the ship over the weekend. Success is, however, not guaranteed.

What is the worst case scenario?

If the ship is structurally damaged during salvage operations and/or not refloated by the time weaker tides set in around Good Friday, the Suez canal could be blocked for multiple weeks. This would force shipping to be redirected around Suez, increasing transit time from Asia by up to 8 days for Northern Europe and up to 15 days for Mediterranean destinations. 

Furthermore, this would profoundly disrupt container ship schedules, causing new blank sailings and much greater delays, especially for cargo already in transit. Disrupted supply chains might cause production standstills in some industries. Oil and fuel prices in Europe will also temporarily increase.

What can European shippers expect right now?

Even if the “Ever Given” can be refloated quickly, the ship delays that have already built up will result in:

  • Delay in arrival and discharge of cargo scheduled to reach Northern Europe from March 31st  onward
  • Delay for container liner service ships scheduled to depart Northern Europe from April 2nd onward
  • Increasing shortage of empty containers for the upcoming two weeks

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