The vessel Ever Given that ran aground Tuesday morning amid high winds and a sandstorm has now been reportedly refloated.
The wait is over! The world’s most expensive traffic jam is now clear and Ever Given is partially free. A video posted on social media today appeared to show that the stern of the Ever Given has been swung towards the canal bank, opening space in the channel. This has raised hopes that traffic could soon resume in the Suez Canal
After several days of failing to free the vessel, on Sunday canal officials began preparing to remove some of roughly 20,000 containers on board the ship in order to lighten the load. Bur what really helped was the thing that landed the ship here in the first place: Nature.
After the past week saw multiple efforts to refloat the ship that is bigger than the Empire State Building, the salvage team rushed to make the most of the moon and the tides. According to the New York Times, as water levels swelled overnight, the hours spent digging and excavating millions of tons of earth around the ship paid dividends as the ship slowly regained buoyancy.
The reason why it sent the world in frenzy is that the canal which runs through Egypt is one of the busiest trade routes. A traffic jam on this route meant other ships had to reroute around Africa.
The Global Trade
To catch you up to speed, Suez Canal is a man-made waterway that connects the Red and the Mediterranean seas through the Isthmus of Suez, dividing Africa and Asia. This canal belongs to Egypt and was opened in 1869. Due to this canal’s construction, trading globally became more accessible as it provided a direct route from North Atlantic and Indian Oceans. The ships no longer had to circumvent the Horn of Africa. Around 12% of global trade is carried out via this canal.
Cargo ships travel one at a time through this canal in order to avoid any accidents since the ships, as you can imagine carrying so many goods, would be massive, and it would be difficult for two ships to pass this canal at the same time. On Tuesday, a sandstorm hit a container ship named Ever Given at the Red Sea. Ever Given is a container ship that is registered under the Panama flag and was built in 2018, with a carrying capacity of 20000 TEU (twenty-foot equivalent unit).
This Sandstrom hit the container ship and decreased its visibility and bettered the ship with heavy winds. Due to this, the vessel got wedged sideways across the canal, blocking any entry and exit. Due to the ship blocking the canal, goods worth $10 million have been held up since Tuesday, which could be dangerous and cause economic fallout.
The Lloyd Journal, an iconic shipping journal, estimates that $9.6 million worth of good pass through this canal every day, of which $5.1 billion of the traffic is westbound and $4.5 billion is eastbound. More than 50 ships travel through this canal, carrying 1.2 billion tons of cargo on average.
The blockage, if not cleared soon, will delay a lot of parts and raw materials being transported for European products, cotton from India for clothes, petroleum from the Middle East and auto parts from China. There is no virtual alternative for transporting these goods from Asia to Europe like rail or truck transportation, says Sharat Ganapati, economics professor, Georgetown University.
The Shortage Of Supplies
This traffic at the canal could also raise demand for consumer good during this pandemic period as imports from Europe, or any other country will be delayed, and as a result, empty containers will be returned back to Asia. Since there are restrictions in place to contain the COVID-19 outbreak, crews have been trapped in the merchant ships. The traffic at the ports has become so much that the container ships anchoring off the California coast are unable to dock and unload their goods as well. Semiconductors and rare-earth elements which are used in manufacturing cars and other consumer products are in deficit.
The U.S. may not experience much pressure from this traffic as most of the finished products are shipped from Asia to the States vis the Pacific Ocean. But some of the parts for the products that are usually assembled in Europe and shipped to the U.S. directly may be delayed.
The most affected industry
The industry that has been most affected by the blockage is the oil industry. Brent crude oil, the price of this is an international benchmark, rose to 2.85% after the news about blockage in Suez Canal broke. This could be a big issue as the price of petrol in India had already reached 100 rupees. Measures are being taken to ensure that the ship is set free by a company named Boskalis. The CEO of Boskalis, Peter Berdowski, issued a statement on a Dutch television programme, Nieuwsuur, “We can’t exclude it might take weeks, depending on the situation. It is like an enormous, beached whale. It’s an enormous weight on the sand.”
Shoei Kisen Kaisha, the owner of EverGreen, issued a statement on Thursday apologizing for the situation and said, “We are determined to keep on working hard to resolve this situation as soon as possible. We would like to apologize to all parties affected by this incident, including the ships travelling and planning to travel through the Suez Canal.”