Suez Canal Blockage
The Suez Canal is one of the world’s most used shipping lanes. On Wednesday, the canal made headlines as a shipping container the length of the Empire State building got stuck in its waterways, creating a blockage in a waterway that has 12% of all foreign trade move through it each year.
This isn’t a story you often hear — most people don’t care about maritime logistics, and it’s a rarely seen topic in the national news. However, maritime logistics are critical to international trade, and this story serves as a reminder of the fragile existence of our global maritime supply chain, as well as the risks associated with maritime logistics.
The 59-foot-wide shipping container is called the Ever Given, and according to shipping data firm Lloyd’s List, the stranded vessel is preventing an estimated $400 million in trade per hour.
If the Ever Given stays stuck across the canal, shipping firms will have to consider moving ships across Africa, which could take up to two weeks longer. All of this means that deliveries of goods and essential resources between Asia and Europe will be postponed.
But how did the Ever Given get stuck in the first place? Reports say a sandstorm struck the mega-container on Tuesday, reducing visibility and thrashing the ship with strong winds. The ship became wedged sideways across the Suez Canal because of the damage.
Currently, it’s unclear when the Ever Given will be set free. A company using tugboats and dredgers to free the vessel said it could take days or even weeks.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.