The 2021 Suez Canal Blockage

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March 28, 2021

Suez Canal was opened in 1869 and one of the most important trade routes on the Globe. The 194 km canal extends from Port Said in the north to the Southern Terminus of Tewfik in the port city, Suez. Before the blockage, 52 ships per day passed the canal daily on an average, accounting for 12% of global trade. Data from shipping expert Lloyd’s List values the canal’s westbound traffic at roughly USD 5.1bn a day, and eastbound daily traffic at around USD 4.5bn – A whooping USD 3,504 bn a year. Effectively connects the manufacturers in the Far East, South East, and Indian Subcontinent to Markets in Europe and East Coast.
The Incident
The 400 m Golden Class Ever Given launched in 2018 by Japan’s Shoei Kisen Kaisha and time chartered by Evergreen Marine ran aground in the Southside of Suez Canal near the village of Manshiyet Rugola on 24th March 2021 and brought the canal passage to a still. It was 5th inline on the Northbound journey up the Canal and had 15 vessels behind it in the canal when it ran aground. As of today, more than 300 vessels are stuck on either side of the canal.
Suez Canal
Tugboats, Dredgers, Excavators, Diggers guided by the Top Consultants in Ship Salvaging is now working round the clock to dislodge the 210,000-ton ship for days now. There is no official timeline on when the canal will be finally cleared for passage and speculations suggest it could take weeks before things are normalized.
Global Ramification
Even before Suez Canal was blocked disrupting one of the busiest shipping routes, Global Supply Chain was in total chaos. Covid-19 literally broke the backbone of the Global Economy and its effects were unprecedented. Strangely, demand grew exponentially but the supply couldn’t catch up due to restrictions held by different governments around the world. Empty containers were fast accumulating and stuck in different consumer markets while an acute shortage of them was seen in manufacturing hubs. On top of this, Container Shipping Companies reduced their capacity expecting a falling demand and all this caused the Container Shipping to even Triple in some routes. A container on East Asia to US West Coast Trade costs upwards of USD 4,500 as compared to USD 1,500 at the start of 2020. 
The non-availability of Truck Drivers in Europe and the US further complicated the Supply Chain network around the world and this is causing an unbearable increase in costs at all levels of the Value Chain. With equipment shortages, space issues, and high Sea Freight, many started using Air freight thereby drumming up the price and reducing available capacity drastically. All in all, a time of mayhem and madness.
And then Global Trade got hit by the Suez Canal blockage. Panic ensued around the world, and the effects of it can be seen now everywhere. 300 ships or more carrying cargo valued north of USD 10 bn is just lying still in the waters. Huge delays are now expected; container shortage and Vessel Space issues are going out of control globally and Freight Rates are expected to increase. As a response, the Air Freights have also gone up on the short-term blocking space for regular movers. International companies have now no other option than bracing for possible rising costs and Supply chain hurdles.
Alternate Solutions
Main Line Shipping Operators with vessels in and around Suez Canal are now considering taking a detour on the Historic Route around the African Continent via Cape of Good Hope. It takes on an average 12 days more than the Suez route and a vessel will have to clock an additional 3500 nautical miles and of course that makes it a very expensive option.
Suez Canal
Credits: World Street Journal
Airline rates have gone significantly up and space is becoming a more valuable commodity than the actual cargo itself! Only a handful of Forwarders have been able to block space out of Far East on flights and the demand is only expected to increase more.
Clarion Shipping’s Management is closely monitoring the situation and has since formed an Ad hoc team to ensure the impact on its clients is reduced significantly. The team has started talks since last week with all Major Shipping Line and Clarion shipping’s Strategic Partners around the world for carving out a Plan B. Bookings for the Far East and the Middle East to Europe and US Coasts will restart soon ensuring the impact on its client is minimized. 
Clarion shipping has procured and blocked Air Cargo Space in strategic routes from Far and the Middle East to Europe and USA on different airlines to provide seamless service to its customers. Also, Clarion shipping’s Air Charter team can arrange for Charter from any part of the world at very short notice. In the Liquid & Bulk Logistics front, the Flexibags manufactured and supplied by Clarion Shipping can easily handle significantly longer transit time as compared to its competitors thereby ensuring the safety of the cargo.
Please contact Clarion Shipping Services for further details and Solutions

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