Suez Canal blocked by huge ship stops billions of dollars in trade

Images captured from MarineTraffic vessel tracking show the extent of the build-up.

Research firm StoneX noted that 24 of the ships transport crude, 15 are refined product tankers and 16 are liquefied natural gas / liquefied petroleum gas carriers.

For ships waiting to cross the canal, the alternative options are limited.

“As the delays continue, shippers will have to address the unpleasant decision to turn around and head for the Cape of Good Hope or wait in the Red Sea and the Mediterranean,” the data company said on Kpler core products in a customer note.

Rerouting dramatically increases the duration of a trip, which translates into higher costs. Sailing from the Suez Canal to Amsterdam takes just over 13 days at 12 knots, compared to 41 days if you travel around the Cape of Good Hope to the southern tip of Africa.

The vessel got stuck horizontally in the waterway as a result of high winds. Several tugs were dispatched to the scene and a team from Smit Salvage was called in to help.

“Dredging operations to help refloat the vessel are continuing. In addition to the dredges already on site, a specialized suction hopper dredger has arrived on site, ”said Bernhard Schulte Shipmanagement, who is the technical director of the vessel. The firm said an early attempt to refloat the ship on Thursday failed and another attempt would be made later today.

The enormous freight transporter is over 1,300 feet long and approximately 193 feet wide. It weighs over 200,000 tonnes. One end of the ship was stuck in one side of the canal and the other extended almost to the other side.

Nearly 19,000 ships crossed the canal in 2020, for an average of 51.5 per day, according to the Suez Canal Authority. The ship was sailing from China to Rotterdam when it ran aground.

The blockage of the channel is exacerbating supply chains that were already strained amid the disruption caused by Covid-19.

“While it is premature to assess any impacts resulting from the incident, our channel checks indicate that in the short term, the blockage is likely to add to industry supply tensions, which are already hampered by continued supply chain bottlenecks (Port and Ship Congestion / Container Shortage) caused by COVID-19 as liners redirect current trips to alternative routes, resulting in longer travel times longer and additional delays, ”JPMorgan wrote in a note to customers.