May 15, 2021

The Suez blockade paralyzes the transit of more than 8,000 million a day in goods | Economy

The traffic jam on the Suez Canal, the route through which 12% of the world’s cargo and oil tanker traffic passes, is beginning to tighten up the economy. The paralysis affects a daily traffic of 8.100 million euros in merchandise, according to the estimate of Lloyd’s List, and after three days of unsuccessful maneuvers to free the Ever Given, one of the largest ships in existence, the congestion is pressing.

Until this Thursday, some 165 vessels are waiting to transit the strategic sea route that connects the Red Sea with the Mediterranean, according to the company specialized in information on maritime trade. The Suez Canal is used daily by at least 50 ships and containers account for 53% of the tonnage of the sea passage.

Although the first reactions to the blockade caused an increase of up to 6% in the price of Brent on Wednesday, the economic impact goes much further. In Spain, both the industry and the ports are beginning to worry and are facing an “information blackout” on the status of shipments by shipping companies, according to Jordi Espin Vallbona, Secretary General of Transprime, the Spanish association of loading companies .

“People have been concerned about the rise in oil and energy, but nobody cares about goods. Goods are what generates wealth and they have to be delivered,” denounces Espin, who explains that for each day of the blockade delays approximately 100,000 containers.

Satellite image of Ever Given, stranded in the Suez Canal, this Thursday.
Satellite image of Ever Given, stranded in the Suez Canal, this Thursday. AFP

The secretary affirms that only through the satellite information of the ships have they been able to confirm that some have changed their route, but they still do not know what the new itinerary of the boats is, the merchandise they transport or if they will change the port of arrival. “Without this information, we cannot estimate,” Espin insists.

The textile, metal manufacturing and electronics sectors are expected to be the most affected after the traffic jam, as they account for the largest item of imports on the journey between Asia and Europe.

The delay could also affect the oil sector, currently waiting for some 13 million barrels of crude to be transported on 10 oil tankers, according to Arthur Richier, an analyst at energy intelligence company Vortexa. Added to this delay are nine vessels with clean petroleum products and biodiesel.

An excavator works to unclog the Ever Given ship this Thursday.
An excavator works to unclog the Ever Given ship this Thursday. Europa Press

At the moment, the Suez Canal Authority (SCA) has confirmed that eight tugs are working on the tasks to move the ship. “We cannot exclude that it could take weeks, depending on the situation,” acknowledges Peter Berdowski, CEO of the Dutch company Boskalis, who is working on the operation. “It is like a huge beached whale. It is a huge weight on the sand, ”says Berdowski.

Algeciras, on guard

Industry sources acknowledge that there are already delays in the arrival of freighters due to the closure of the Suez Canal to the port of Bahía de Algeciras, where a fifth of the country’s maritime traffic moves. In addition, some shipping companies are communicating cancellations, that is, ships that at first would make a stopover in the port and then set course for northern European destinations will not do so, either because they have decided to turn around, are at anchor or searched for new routes.

The alternative to reach European ports would be a route of some 21,000 additional kilometers – and about 380,000 euros more for freight – through the Cape of Good Hope, the southern tip of Africa. Denmark’s AP Moeller-Maersk and Germany’s Hapag-Lloyd AG, two of the world’s largest container carriers, have considered shipping their ships this route to avoid the Suez Canal bottleneck, which already jointly affects 12 of their vessels.

Suez Canalclick on the photo
A map shows the maritime traffic congestion on the Suez Canal.

However, according to Moeller-Maersk, this detour would add an additional five or six days to the route between Asia and Europe. For this reason, they have indicated the possibility of sending the most urgent cargo by air or rail, although they have not confirmed the decision.

For its part, the Spanish Association of Automobile and Truck Manufacturers (Anfac) has indicated that they continue to monitor the situation, but that at the moment they do not have data that the blockade could affect the supply chain of the sector.

The Ever Given was on its way to Rotterdam from China when it was surprised by a sandstorm that reduced visibility, as well as strong gusts of wind that devastated the area, and ended up deviating from its trajectory.

The Panama Maritime Authority (AMP) indicated this Thursday that it opened an investigation to determine “the possible causes of the accident” of the Panamanian-flagged container ship Ever Given. Meanwhile, Bernhard Schulte Shipmanagement (BSM), the managing company of the merchandise transported by Ever Given, ruled out that the incident was due to a technical failure and indicated that the crew is safe and there is no damage to the boat.


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