The blockade of the Suez Canal led to immense effects on cargo traffic and world trade. A brief review: The container vessel “Ever Given” veered off course in a sandstorm on the night of March 24th and grounded in the Suez Canal. After six days, the 400-meter-long and 69-meter-wide vessel chartered by Taiwan’s Evergreen Marine Corp. was freed. Nevertheless, the consequences are still clearly noticeable. According to the Lloyd’s List information service, the blockage cost the global economy around $400 million per hour due to the delays based on the approximate value of goods that are moved through the Suez every day. The Suez Canal Authority alone speaks of losses of 14-15 million US dollars per day. It is now claiming damages of $1 billion due to the days-long blockade and the associated need to salvage the Ever Given. Only when an agreement is reached the canal authority intends to allow the Ever Given to continue its journey.
A total of 422 container ships had to wait in or off the Suez Canal until they could continue their journey. For the destination ports the resolution of the congestion now means above all, preparing for a high workload in order to be able to process the numerous stuck container ships once they arrive.
The Suez Canal
The Suez Canal is one of the most important waterways in world trade. Around 10-12% of global cargo volume and 30% of container volume is handled through the Canal. This means around 50 cargo ships per day and 19,000 annually. Almost all container vessels between China and Germany pass through the Suez Canal – around 98 percent.
To dive a little deeper, let me give you some more background information. The Suez Canal is the connection between the Mediterranean and the Red Sea. It is located between the African and Asian continents and represents the fastest maritime route between Europe and the lands lying around the Indian and western Pacific oceans. Besides, the canal is 193 km long, 280 meters wide in the south and 345 meters wide in the north.
Are there alternative routes?
The blockade has shown how important and at the same time how fragile the Suez Canal is as a waterway for world trade. This opens discussions about alternative routes. The alternative route around the southern tip of Africa takes about a week longer. Furthermore, Russia is trying to promote the northern route as a future alternative. There are however some problems associated with the route since ships have to be accompanied by icebreakers just in case, despite the dwindling ice cover. This incurs costs, slows down speed and makes the route navigable only for ships that can sail in the fairway of the common icebreakers.
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