logistics industry

Global container crunch deepens with cargo ships stranded in Suez Canal

Reuters
Global container crunch deepens with cargo ships stranded in Suez Canal

Osama Rabie, chairman of the Suez Canal Authority, monitors the situation near stranded container ship Ever Given, after it ran aground in the Suez Canal, Egypt, March 25, 2021.

Photo from Suez Canal Authority/Reuters

Switerzland's MSC, the world's No. 2 container shipping line, says all major container carriers are impacted by the blockage in the Suez Canal

The suspension of traffic through the Suez Canal has deepened problems for shipping lines that were already facing disruption and delays in supplying retail goods to consumers, shipping sources said.

Container shipping companies, carrying retail goods ranging from mobile phones and designer goods to bananas, have been struggling for months with disruptions caused by the coronavirus pandemic and a surge in demand for retail goods that led to wider logistical bottlenecks around the world.

In the latest challenge, more than 30 container ships are unable to sail after the 400-meter (430-yard) Ever Given boxship ran aground in the Suez Canal, blocking transit, the sources said.

Attempts are being made to refloat the vessel, but one of the companies involved in the efforts said it may take weeks.

“With supply chains already under pressure, a large container ship has now literally blocked one of world trade’s major routes,” said ING senior economist Joanna Konings. “As the Suez Canal Authority works to free the canal, traffic is building up, and missing inputs will disrupt supply chains.”

Switerzland’s MSC, the world’s No. 2 container shipping line, said all major container carriers had been impacted by the blockage in the Suez Canal.

“As a frequent user of the canal, MSC is monitoring the situation very closely for updates in case any fleet or service network contingency plans would be required and to see how container circulation may be affected in an already challenging market,” it said in a statement.

“MSC customers with cargo due for transit the canal in the coming days should be prepared for potential schedule changes.”

Trade and shipping sources said that, depending on how long the Suez disruptions last, the transport of goods from manufacturers in Asia to buyers in Europe could be affected further.

Leon Willems, spokesman for Rotterdam Port, Europe’s largest gateway, said logistics demand had already been outstripping capacity before the Suez incident.

“Every port in western Europe is going to feel this. We are now 48 hours into this and we hope for both companies and consumers that it will be resolved soon,” Willems said.

“When these ships do arrive in Europe, there will inevitably be longer waiting times,” he said. “We have a lot of space, but we don’t have an unlimited number of docks and cranes to unload these goods.”

Antwerp, another leading European port, had already been facing stretched container logistics for months, its chief executive, Jacques Vandermeiren, told Reuters.

“When you have disturbances in that global supply chain everyone is suffering,” he said. – Rappler.com