In late March, Egypt’s Suez canal was blocked for six days due to a container ship of the Ever Given running aground. The Suez canal, one of the world’s most important and busiest maritime trade routes was blocked, resulting in hundreds of ships being stopped to the Mediterranean. This accident has highlighted the vulnerability of global supply chains and the criticality of the Suez canal for global trade.
The 193km Suez canal was opened in November 1869 and remains the fastest and most direct maritime trade link between Asia and Europe. Approximately 12% of global trade passes through the Suez canal, representing 30% of all global container traffic, and over USD $1 trillion worth of goods per annum. In 2020, approximately 19,000 ships utilised the route. This represents 50 ships per day making the journey between Suez Port and Port Said, carrying between USD $3-9 billion worth of cargo.
Over two weeks on from the Ever Given being dislodged, the stranding still created congestion at major global trade hubs, including in Singapore, Malaysia, Saudi Arabia and the Netherlands due to disruptions to schedules. However, companies in Asia will not only be impacted by the delay of shipments from Europe, but also by a shortage of empty containers returning to the region. One online freight shipping marketplace has suggested a domino effect is now in place with containers shipments being delayed or cancelled, requiring the repositioning of containers, which is making container space sparser and increasing rates.