the suez canal crisis
(written April 2nd)
The Suez Canal blockage crisis made headlines for quite literally being a big boat stuck in one of the busiest waterways, with the route carrying around 12% of global trade. The blockage highlighted how fragile the trade system is, with goods travelling through chokepoints like the Suez Canal, leading to possible damage to the international economy. John Psaropoulos wrote in an Al Jazeera article that the “Suez crisis creates winners and losers in the global supply chain”.
On the 29th of March, after almost a week of being stranded, the container ship was finally able to move back on course. According to the ship’s technical managers, the 25 crew members who stayed on board are safe. While the backlog of boats was expected to clear in 3 days, many believe the domino impact on international shipping may require up to a few months to resolve. Around 400 ships were delayed by the blockage, as they were waiting to cross the canal. Over 5% of worldwide container shipping was held up at both sides of the canal and around the Cape of Good Hope.
The 200,000tonne boat was set free after dredgers dug 30,000 m³ of earth. High tides aided the effort of moving the ship and after a long process, it was able to move. Some boats decided to go the long way around southern Africa and many will arrive at their port far later than originally expected. Consequently, the price of shipping goods to Europe may increase. Maersk, a shipping group, claimed “the ripple effects on global capacity and equipment” were extreme.
The blockage was a reminder of how climate, human error, mechanical error, etc. could lead to catastrophic impacts on trade, and therefore the economy. Professor Ioannis Theotokas, of the University of Piraeus, said, “this crisis led to a lot of losses for freight owners and charterers.” He believes if the blockage had lasted 2 weeks, trade losses close to those in a war would occur. If issues in the canal arise again, Mediterranean ports could be severely impacted. The Syrian government began rationing fuel amid fears of a long hold up as a result of the blockage. The war-torn country was already experiencing oil shortages prior to the closure of the canal. The Ever Given ship is currently undergoing inspections to find the cause of the blockage that damaged global trade for six days.