After nearly a week of the Ever Given container ship being stuck in the Suez Canal and holding back at least 300 other ships, it is finally free. Horns sounded in Egypt in celebration as the ship sailed out of the canal. Suez Canal Authorities expect operations to return to normal within days.
However, the closure has cost the global economy $10 billion per day of closure, with the Asian and European exporters most affected. Companies like Ikea and Caterpillar flagged impacts and tens of thousands of live animals stuck on ships in the area. Additionally, consumer goods and commodities from oil to coffee were also stuck.
In addition to monetary costs, the closure delayed cargo for weeks, if not months. This has forced some to add 9,650 kilometers to the journey and take the long route around Africa to get to their destination.
The Suez Canal serves as a convenient route for Asian and European companies to get their cargo/products across. One of the most critical waterways, the Suez Canal, has not been closed since it was shut for eight years following the 1967 Six-Day War. This was a reminder of the fragility of global trade infrastructure which means supply chain breakdowns will keep happening in the
future.
References:
1) El Wardany, S., Magdy, M., & Koh, A. (2021, March 28). Ships Start to Move in Canal After Ever Given Freed: Suez Update. Retrieved March 30, 2021, from https://www.bloomberg.com/news/articles/2021-03-28/progress-made-in-moving-ship-more-vessels-diverted-suez-update
2) Ha, K. O., Blas, J., Magdy, M., & Koh, A. (2021, March 27). How a Desert Wind Blew $10 Billion of Global Trade Off Course. Retrieved March 29, 2021, from https://www.bloomberg.com/news/articles/2021-03-27/how-a-desert-wind-in-suez-canal-blew-global-trade-off-course
3) Koh, A., El Wardany, S., & Murray, B. (2021, March 25). Dislodging the Suez Canal Ship Said to Need at Least a Week. Retrieved March 30, 2021, from https://www.bloomberg.com/news/articles/2021-03-25/big-container-lines-consider-diverting-ships-around-africa
4) Koh, A., Magdy, M., & El Wardany, S. (2021, March 29). Suez Canal Has Reopened to Traffic After Giant Ship Is Freed. Retrieved March 30, 2021, from https://www.bloomberg.com/news/articles/2021-03-29/the-giant-ship-blocking-the-suez-canal-is-finally-freed-kmut46wg
5) Sutherland, B. (2021, March 26). Suez Ship Grounding Makes Case for Big Rail MergerBrooke. Retrieved March 30, 2021, from https://www.bloomberg.com/opinion/articles/2021-03-26/suez-canal-ship-blockage-and-railroad-merger-linked-by-supply-chains
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