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Ports Facing A Tsunami Of Containers From The Blocked Suez Canal. More Than 5% Of World’s Containers Delayed

Ports facing a tsunami of containers from the blocked Suez Canal. More than 5% of world’s containers delayed

Source: PortSEurope
Port Said, Egypt (PortSEurope) March 28, 2021 – More than 5% of the world’s containers are now delayed on ships either jammed on both sides of the blocked Suez Canal or on board of ships sailing around the southern tip of Africa five days after Ever Given, one of the largest container ships in the world, ran aground blocking the planet’s busiest waterway, and further exacerbating
the shortage of containers and container ships. It is estimated that the containers on the ships waiting on both sides of the Suez Canal as well as the ones on board of the ships, taking the 7-12 day, longer journey around the tip of Africa, represent more than 5% of the total available containers in the world (the estimates vary, but the most realistic one is 25-30 million TEUs). Over 320 ships (including dozens of container ships, bulk carriers and liquefied natural gas – LNG or liquefied petroleum gas – LPG vessels) created one of the largest ever sea traffic jams on both sides of the channel and more and more shipping companies redirect their ships to sail via the alternative route (via the Cape of Good Hope), which prolongs their journey by up to 12 days. If these containers reach their destination with a delay of 10 and more days, this is going to create additional pressure on exporters, shippers and above all on ports. This is already starting to be seen in container pricing. Also, shipping rates for oil product tankers nearly doubled after the ship became stranded, and the blockage has disrupted global supply chains. When the Suez Canal is eventually unblocked, the ports worldwide are going to be hit by a tsunami of delayed ship containers. They have to be unloaded, processed, stored, loaded on trucks or trains. But most ports are currently operating at the limit of their containers’ handling capacity, a situation aggravated by the coronavirus pandemic and its related restrictions. Experts warn that if the rescuers are not able to dislodge Ever Given during the high tide that will end on March 28, the next high tide is not expected for another couple of weeks. Despite some predictions that the megaship could be refloated soon, more and more vessels are opting to go around Africa. Some major container lines have even started to reject bookings. Some 30% of the global container ship capacity passes through the Suez Canal. About 12% of world trade (by volume) passes through the channel connecting Europe and Asia. The red-hot container market with sky-high rates and a huge freight demand mostly due to the coronavirus pandemic will continue well into the summer and some experts predict that the major bottlenecks in global supply chains will not be eliminated until early next year. Even if demand for goods normalises by the end of summer, in the autumn the pre-Christmas rush for goods starts in both United States and Europe. The Covid-19 pandemic initially caused a huge drop in containers’ demand, followed by an unprecedented surge in demand, exacerbated by the shortage of containers. The most severe congestion in the trans-Pacific container shipping system is around the U.S. gateway ports of Los Angeles and Long Beach, which are now forecasted to have terminal congestion and vessel backlogs during the next three or more months. The slow return of containers to Asia, particularly to China, has led to container shortage, leading to accumulation of goods in China’s ports and a significant increase in containers’ rates. The main issue is how quickly the empty containers could be redirected to where they are most needed. Ports around the world are still operating in coronavirus quarantine mood and this contributes to containers’ shortages due to a slow pace of loading, unloading, and transporting the containers there. Average container turnaround times have ballooned to 100 days from 60 days previously because of COVID-19-related handling capacity cuts in Europe and the U.S. The 200,000 tonnes Ever Given ship, built in 2018 and operated by Taiwanese company Evergreen Marine, ran aground on March 23 and became lodged sideways across the channel. The ship is 400 m long and 59 m wide. She can carry up to 20,000 TEUs and is reportedly currently loaded with more than 18,000 TEUs. Dislodging Ever Given could take “days to weeks, depending on what you come across,” according to Peter Berdowski the CEO of Boskalis, whose sister company SMIT salvage is now working to free the ship. Berdowski told Dutch TV that his company had determined it was impossible to free the ship with its current cargo on board. “The ship with the weight that it [has] now has is impossible to pull,” he said. “You can forget about that”. During 2020, some 19,000 ships passed through the Suez Canal. Copyright (C) PortSEurope. All Rights Reserved. 2021

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