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03/29/2021

Blocked Cargo Ship in Suez Canal is Freed

The cargo ship that slipped into the side of the Suez Canal and held up billions in global trade for six days has been freed, multiple news outlets have reported.

The cargo ship that slipped into the side of the Suez Canal and held up billions in global trade for six days has been freed, multiple news outlets have reported. The ship, Ever Given, became lodged in the side of the canal after a strong gust of wind likely threw it off course.

The incident signals a significant issue with global trade that could have long-lasting impacts for supply chains. On an immediate scale, the nearly weeklong impasse at the canal, which connects trade between Europe and Asia and carries around 13% of global maritime trade, will have a short-term delay for numerous consumer goods and oil transports. More than 360 ships have been waiting to pass through the canal, The Wall Street Journal reported.

However, the world’s largest container shipping company, Maersk, cautioned the impact will take much longer to correct. Clearing the line of boats could take “six days or more,” but “ripple effects” will last longer, the company said in a statement. 

“Even when the canal gets reopened, the ripple effects on global capacity and equipment are significant and the blockage has already triggered a series of further disruptions and backlogs in global shipping that could take weeks, possibly months, to unravel,” the statement reads.

Maersk redirected 15 ships to take an alternative trade route around Cape of Good Hope at the southern tip of Africa--a journey that adds up to 19 days to travel time. Many other shippers also sent ships around the long way in the last week as the blockage continued.

The bottleneck exposed a severe vulnerability in trade supply routes and came at a time when supply chains were already strained by Covid-19 impacts. With retail CEOs and consumers feeling more optimistic about the Covid-19 pandemic, some supply chain woes are likely to come to an end, but Ever Given’s mishap may help push innovation forward to avoid future global supply delays and unpredictable disruptions.

Ever Given will be towed to an anchor point to free up traffic in the canal Monday.