A satellite image shows a failed container ship Ever done after it crashed in the Suez Canal, Egypt, March 25, 2021.
CNES Airbus DS | Reuters
Ever Date, one of the largest container ships in the world, is still embedded in the Suez Canal, and the economic effects of the blockade – now on its fourth day – are beginning to unfold.
White House Press Secretary Jen Psaki said Friday that the United States is closely monitoring the situation. “We have provided US assistance to the Egyptian authorities to help reopen the channel … these talks are ongoing,” she said during a press briefing, before adding that there could be “some potential impacts on energy markets.” “.
Oil prices rose on Friday amid speculation that the ship could take off for weeks. West Texas Intermediate and Brent crude futures each advanced more than 4%. Earnings come after prices fell on Thursday, despite the deadlock.
“Traders, in a change of heart, have decided that the blockade of the Suez Canal is actually becoming more significant for oil flows and supply deliveries than they have previously concluded,” said Paola Rodriguez-Masiu, vice president of oil markets at Rystad Energy. .
A satellite image shows the Suez Canal blocked by the failed container ship Ever Date in Egypt March 25, 2021, in this image obtained from the Twitter page of the general director of Roscosmos Dmitry Rogozin. Picture taken on March 25, 2021.
Roscosmos | Reuters
Of the 39.2 million barrels per day of crude oil imported by sea in 2020, 1.74 million barrels per day passed through the Suez Canal, according to research firm Kpler.
This represents less than 5% of total flows, but as the accumulation spreads, the impact increases.
Bernhard Schulte Shipmanagement, the ship’s technical manager, said on Friday that another attempt to re-float the freight carrier proved unsuccessful.
A specialized suction dredger that can change 2,000 cubic meters of material every hour is now on site and “arrangements are also being made for high-capacity pumps to reduce water levels in the ship’s empty space and in the bow thruster chamber . “The company said on Friday.
The failed container ship Ever Date, one of the largest container ships in the world, is seen after it crashed in the Suez Canal, Egypt, March 26, 2021.
Mohamed Abd El Ghany | Reuters
Bernhard Schulte added that two additional tugs will arrive by Sunday to help with the refloating operation.
Douglas Kent, executive vice president of strategy and alliances at the Supply Chain Management Association, said that even after the ship is disconnected, the impact will continue to be felt. Ships will arrive in ports simultaneously creating new traffic jams, for example. Freight programs created months in advance will have to be remodeled with ships now in the wrong place.
More importantly, there is a lack of visibility throughout the supply chain.
“The whole knock-on effect through the multi-hierarchy of the supply base – we won’t know that,” Kent said. “Companies have no visibility in their supply chain.” Although a company may know that it has a product placed on a stopped ship, the impact of delays on the line is not known.
An excavator is trying to release the failed container ship Ever Date, one of the largest container ships in the world, after it crashed in the Suez Canal, Egypt, March 25, 2021.
Suez Canal Authority Reuters
The Suez Canal manages about 12% of global trade, making it a key crossing point. Every day of the blockade disrupts goods worth more than $ 9 billion, according to Lloyd’s List, which translates to about $ 400 million an hour.
Some ship operators have already decided to redirect their ships, anticipating that Ever Date will not be deployed soon. Sending ships around the Cape of Good Hope adds more than a week of sailing, while increasing costs.
“It’s a terrible mess,” said Anthony Fullbrook, president of the OEC Group’s North American region.
The disruption caused by the backlog in the Suez Canal is taking place as global supply chains are already strained by Covid-19.
“There is already a lack of equipment, space, everything is working at full capacity … It is already slowly melting, and this will exacerbate it,” he added.