World Trade Affected by Container Ship Blocking Suez Canal

Ruben Fields
March 26, 2021

Evergreen's founder, Chang Yung-fa, opposed operating ships able to hold any more than 8,000 containers, according to The Telegraph. If the obstruction is not resolved soon, the company could be held liable for lost revenue by the Suez Canal Authority, as well as for damages incurred by other ships. "We would like to apologize to all parties affected by this incident, including the ships travelling and planning to travel through Suez Canal".

Salvage experts warned the shut-down could last days or even weeks, potentially forcing businesses to re-route cargo ships around the southern tip of Africa in a blow to global supply networks. The Japanese Shipowners Association says 1,374 vessels affiliated with the group passed through the canal in 2019, roughly 7% of the total.

The owner of the oddly named Ever Given - the owner happens to be a company called Evergreen - told the Financial Times the ship is "suspected to have met with a sudden gust of strong wind, which caused the ship's body to veer from its course and accidentally run aground". "When these ships do arrive in Europe, there will inevitably be longer waiting times".

Ever Given, nearly as long as the Empire State Building is high, is blocking transit in both directions through one of the world's busiest shipping channels for oil and grain and other trade linking Asia and Europe.

"We have a problem, logistically, about getting those planes, trains, trucks and ships in the right spots to meet up with the demand that we have right now", he said. He admitted, however, it could take weeks to complete the task. It usually carries cargo between Asia and Europe.

Canal service provider Leth Agencies said at least 150 ships were waiting for the Ever Given to be cleared, including vessels near Port Said on the Mediterranean Sea, Port Suez on the Red Sea and those already stuck in the canal system on Egypt's Great Bitter Lake.

The Egyptian authorities have announced that they are considering paying compensation to stalled ships due to the accident. Authorities hope to do the same to the Ever Given when they can free it.

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An initial report suggested the ship suffered a power blackout before the incident, something Bernhard Schulte Shipmanagement denied.

Almost 25 percent of the ship traffic that passes through the Suez Canal is container ships like the Ever Given, it said.

Oil prices, which rebounded on Wednesday after news of the blockage, dipped again on Thursday morning.

The British publication Lloyd's List estimates each day that the Suez Canal is closed effects over $9 billion worth of trade that should be passing through it.

It added: "We are extremely sorry for causing tremendous worry to the ships that are traveling or schedule to travel in the Suez Canal, and all the related people".

At times, China has been exporting three containers for each one imported as firms seized market share from rivals in hard-hit countries overseas.

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