How One Ship Caused a Global Traffic Jam

On March 23, 2021 the container ship Ever Given was on it’s journey between the port of Tanjung Pelepas in Malaysia and Rotterdam in the Netherlands when it was sailing through the Suez Canal in Egypt. According to the shipping company the vessel was hit by a strong sand storm with wind speeds up to 74 km/h causing it to no longer be steerable. At 7:40 am local time, the ship rammed into the side wall of the canal. About half an hour later, the first Egyptian tugboats and fire-fighting ships arrived, but freeing the ship will prove to be a difficult undertaking. The first images began to circulate on the internet and show that the ship has dug itself into the side wall. And satellite images reveal how the ship is completely blocking passage through the canal. The Ever Given is a type of ship that can carry a maximum of 20,124 containers, which makes it one of the largest container ships in the world. To make the size clearer, here is a person for comparison. Here the Titanic and here is the Empire State Building in New York laid on its side. Early attempts to free the ship with tugboats alone did not lead to success and excavators began trying to free the ship. The profile of the Suez Canal is angled on the sides, which means it only has its full depth in the middle. News audio: "A fleet of tugboats trying to free the Ever Given. President Biden says the US is ready to assist" "Dutch firm Smit Salvage and Nippon Salvage from Japan have been bought in to rescue the Ever Given" "Salvage crues have been working round the clock at the moment concentrating on digging tons of sand out from under the ships bow and stern" "The stern of the vessel is now free and the egyptian authorities say they are hoping higher tides and the arrival of more tugboats on sunday will help their operation". The artificial canal connects the Red Sea to the Mediterranean sea. For the busy trade routes between the Indian Ocean and the North Atlantic the canal cuts travel times for container ships by around 8 to 10 days. As the only alternative is to circumnavigate the entire African continent. The canal is an important source of revenue for Egypt. The country receives more than 5 billion USD annually through transit fees which in turn means that the average price per transit is over 300,000 dollars. One limitation however is that a large part of the route can only be shipped in a single-lane. Therefore traffic has to alternate between north traveling and south traveling ships. There are waiting areas, such as in the Great Bitter Lake where ships can hold for traffic and where they have the opportunity to turn around if necessary. Since 2015 due to the construction of the “New Suez Canal” a larger part of the canal has two lanes and is therefore navigable in both directions at the same time. However there is only a single lane where the Ever Given is stuck which means all traffic on the canal has come to a standstill. Over the course of the blockage about 370 ships were waiting for passage on both sides of the canal. And it is estimated that every day this incident held up goods worth 9.6 billion USD. The uncertainty about how long the blockade will last makes it difficult for shipping companies to decide whether it makes more sense to wait until the canal is clear or to send their ships on the way to the Cape of Good Hope on the southern tip of Africa. Some have made this expensive decision including the Ever Greet, the sister ship of the Ever Given that blocks the canal. Both ships are are operated by the shipping company EVERGREEN. Such a situation is particularly critical for ships that have livestock on board for which there is not enough water and food for extremely long delays. And the blockade came at a very unfortunate time as global supply chains are already operating at their limit because of a result of the Covid19 pandemic. In many countries, the ratio of imports and exports has changed recently. Lockdowns and the decreased economic activity lead to lower production and fewer exports in many places, especially in Europe and North America. By contrast, imports from Asia are still needed, for example from China where production was able to start up again much sooner. This leads to an imbalance and a shortage of containers because they leave Asia but do not come back at the same speed. North America currently faces a 40% imbalance of containers, which means that for every 100 containers that arrive only 40 are exported back. The delays on the Suez Canal are stressing an already tense logistics system. News reporter: "heralded by a fanfare of horns the Ever Given is afloat at last". On March 29, at about 3pm local time roughly 150 hours since the ship got stuck authorities were able to free the Ever Greet. They took advantage of high spring tides around full moon and used 14 tugboats to dislodge the Ever Given. The ship was then towed to the Great Bitter Lake for inspection and traffic along the Suez canal continued at 7pm local time. Even though the blockade is resolved it is expected that the large wave of container ships arriving at ports in Europe and Asia in quick succession will overwhelm the handling capacity of even the biggest ports. So the delay is expected to cause a ripple effect that will add stress to port facilities and even inland infrastructure. News reporter: "A maritime accident with global implications. Shipping analysts are already predicting disruptionsand price hikes". "Europe likely hit first with possible shortage of household products" "So if you're at the shops and what you want isnt there or costs a bit more - remember that ship." It might seem as if this blockage doesn’t affect us because it’s happening in indirect ways. But it does and not just some of us but pretty much all of us. About 12% of the world trade volume passes through the Suez Canal. And a complete blockage of it, even for just a few days affects an astounding amount of goods and resources, and causes severe economic effects both due to direct damages as well as due to the uncertainty that it creates.

Channel: neo

Views: 2,832,093

Rating: 4.9070406 out of 5

Keywords: Suez Canal, suez, ship, container ship, logistics, port, ever given, evergreen, trade, economics, economy, shipping, why, mapped, map, explained, vessel, shortage, traffic, congestion

Id: 8RxmRw1kCrc

Length: 8min 10sec (490 seconds)

Published: Wed Mar 31 2021