Supply chain and logistics experts react to Evergreen ship blocking Suez Canal

Supply chain and logistics experts react to Evergreen ship blocking Suez Canal

Yesterday morning, a 400m-long Evergreen container ship ran aground in the Suez Canal, causing a huge jam of cargo vessels to build up. Naturally, supply chain leaders and influencers have been quick to give insights on consequences of the accident.

According to the BBC,  the ship’s captain said the ship was taken of course by „a suspect gust of wind” just north of the port of Suez.

 

Writing on LinkedIn, renowned and respected shipping expert Lars Jensen said the accident will inevitably cause a spike in cargo into Europe’s main ports.

He also says that it will delay the movement of 55,000 TEU of containers back to Asia per day:

If we assume that vessels presently are essentially full due to the market pressure this means 55,000 TEU of cargo from Asia to Europe daily. The current expectation is that it will take some 2 days to clear the canal which will cause the delay of 110,000 TEU of cargo – which will cause a spike of cargo into the main ports in Europe as this will now arrive at the same time as cargo arriving normally a few days later. In other words, this increases the risk we will see port congestion in European ports one week from now. On top of that, it simultaneously delays the movement of 55,000 TEU of containers back to Asia per day – further adding delays to getting empty containers available in Asia. Add to this the impact on Asia-USEC and Mid-East/India to Europe services via the Suez Canal.

The reaction of Akhil Nair, vice president of global carrier management at SEKO Logistics in Hong Kong, was similar.

Nair told the New York Times earlier today that “If that’s going to be a knock-on delay, then you’ll see piling up and bunching up of ships on their arrival in Europe as well.” He also added “It’s just one more factor that we didn’t need.”

Daniel Stanton, also known as Mr Supply Chain, reacted to the accident by saying “It’s moments like this that remind all of us why we need real time visibility to our cargo.”

In addition, Mr Stanton warned that the blockage could cause a ripple effect for global supply chains.

Moreover, in an interview with the Daily Telegraph, former merchant mariner Salvatore Mercogliano has highlighted the cost to Egypt’s economy, as the country is losing around 700,000 dollars for every additional day the canal is blocked.

Fortunately, an update at 12.00 CET today has said that, according to information from the Suez Canal Authority, the grounded vessel has been partially refloated and is now alongside the Canal bank. Convoys and traffic are expected to resume as soon as the vessel is towed to another position.

However, it is not known how long this will take – creating an unwelcome continuation of uncertainty for shippers.


Photo credit: Dave Minogue / Wikimedia Commons

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