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Suez Canal logjam could stretch on for weeks, slam world economy

By
Post Staff Report
Published March 25, 2021
Updated March 26, 2021, 11:11 a.m. ET

The growing traffic snarl in the Suez Canal could take weeks to untangle — and is threatening to wreak havoc on the world economy in the process.

The giant cargo ship that’s wedged across the canal is blocking an estimated $9.5 billion worth of shipments daily. The crisis — now in its third day — could stretch on for weeks, taking a devastating toll on global commerce as it traps shipments of everything from oil to electronics.

At least 150 ships are now stuck behind the Ever Given, a 200,000-ton cargo vessel that ran aground in the narrow channel on Tuesday. International crude prices surged 6 percent the following day — a move some analysts blamed on worries about oil shipments coming out of the Suez.

Meanwhile, logistics experts said the blockage would likely spur delays and added costs as deliveries of crucial goods between Europe and Asia, as deliveries of heavy equipment, clothing and even crucial medical supplies continue to get further backed up.

“We can’t exclude it might take weeks, depending on the situation,” said Peter Berdowski, CEO of Boskalis, told media on Thursday. “It’s an enormous weight on the sand. We might have to work with a combination of reducing the weight by removing containers, oil and water from the ship, tug boats and dredging of sand.”

Built over a decade in opened in 1869, the Suez Canal is an artificial waterway in Egypt that connects the Red Sea to the Mediterranean. Nearly 19,000 vessels passed through it last year carrying 1.2 billion tons of cargo, according to the Suez Canal Authority, the Egyptian state institution that operates the channel.

This handout satellite image shows the Taiwan-owned MV 'Ever Given' (Evergreen) container ship, a 400-meter- (1,300-foot-)long and 59-meter wide vessel, lodged sideways and impeding all traffic across the waterway of Egypt's Suez Canal.
This handout satellite image shows the Taiwan-owned MV ‘Ever Given’ (Evergreen) container ship, a 400-meter- (1,300-foot-)long and 59-meter wide vessel, lodged sideways and impeding all traffic across the waterway of Egypt’s Suez Canal. CNES/AFP via Getty Images

The Ever Given — a 440 million-pound cargo ship that’s as long as the Empire State Building is tall — was en route from Rotterdam to China when it ran aground Tuesday after high winds turned it sideways, according to shipping data.

The bow of the ship is still lodged deep into one side of the canal, and dredging will be required, the Wall Street Journal reported on Thursday. Workers also will need to take off fuel, ballast water and possibly some of the ship’s cargo. That could require the help of helicopters Officials are hoping a higher-than-normal tide expected over the weekend could help lift the ship free.

The stranded vessel is blocking a route that carries about 13 percent of the world’s trade. On Thursday, the ship’s owner apologized for the mess.

“We are determined to keep on working hard to resolve this situation as soon as possible,” Shoei Kisen Kaisha said in a statement Thursday. “We would like to apologize to all parties affected by this incident, including the ships traveling and planning to travel through Suez Canal.”

The 400-meter, 224,000-ton Ever Given container ship, leased by Taiwan's Evergreen Marine Corp, blocks Egypt's Suez Canal in a BlackSky satellite image.
The 400-meter, 224,000-ton Ever Given container ship, leased by Taiwan’s Evergreen Marine Corp, blocks Egypt’s Suez Canal in a BlackSky satellite image. via REUTERS

If the logjam can’t be undone, experts say cargo companies will be forced to reroute their shipments around the Cape of Good Hope at the bottom of Africa — a detour that typically adds 14 days and 5,000 nautical miles to the commute.

That could send prices for vital goods including cars, lumber and even critical medical supplies soaring in the coming weeks and months, officials said.