Suez Canal Blockage Holds Up $9.6 Billion in Daily Shipments
The grounded cargo ship Ever Given is forcing firms to reroute cargo from the Suez Canal for weeks to come.
Global companies have begun to reroute cargo shipments away from the Suez Canal as analysts estimate that the blockage caused by the grounded cargo ship Ever Given may take weeks to clear.
Seven tankers transporting liquefied natural gas were diverted on Friday, the fourth day of the crisis. At least three were diverted towards the longer route around Africa via the Cape of Good Hope, according to Kipler analyst Rebecca Chia.
"A total of 16 LNG vessels’ planned transit via the Suez Canal will be affected if the congestion persists until the end of this week,” Chia said, adding that there will be considerable delays in the loading schedule at Ras Laffan from the beginning of April due to this congestion.
The 400-metre Ever Given ship has been stuck in the Suez since Tuesday morning after losing power and running aground, blocking the width of the canal. Dutch and Japanese engineering teams began to seek a way to dislodge the ship on Thursday, and Egypt has suspended all navigation within the canal.
The backlog caused by the blockage has sparked fears of piracy in the unstable regions surrounding the canal as ships are forced to remain static. Lloyd’s List tracking data shows more than 160 vessels paused at either end of the canal, including 41 bulk carriers and 24 crude tankers.
The Suez Canal, an artificial sea-level channel in Egypt that connects the Mediterranean Sea to the Red Sea, is one of the world’s busiest waterways.
Its blockage will have an extreme negative impact on global trade. Approximately 13% of the world’s trade passes through the Suez Canal – an average of $9.6 billion per day, according to shipping data.