Several weeks of freight disruption expected despite Suez reopening

April 16, 2021

Latest update - Suez Canal

Freight Forwarders expect delays, extra pressures, and higher costs in ocean supply chains for all of April and beyond, already reporting a surge in inquiries for ‘distressed ocean freight’ shipments that have been delayed from their original schedules. A UK freight forwarder estimated that it would take around 12 days simply to clear the canal backlog at either end of the Suez Canal, but that the impact to container freight “will last for several weeks, possibly longer”.

With the Suez roughly midway between the Far East and the UK, it said the delays, schedule interruptions, and pending congestion “will unwind throughout April”. As we all know the accidence of Ever Given grounding in Suez on March 23th on her westbound voyage. Fortunately, the case is solved and not last too long. But for sure, it will affect the time of westbound cargo availability in Europe as well as any change regarding the eastbound voyage of the vessel from Europe. It will further affect the allocation and schedule which may cause the space tight and rate increase.

Forwarding and other freight sources report some easing of ex-Asia ocean freight markets in the last three or four weeks, including reductions in pricing from China, better availability of containers at origin, and some easing of congestion in destination ports. But some believe it may be ‘the eye of the storm’, with more disruptions to come as recently blanked services come back on line.

Ever Given’s owners received a claim

Ever Given’s owners received a claim from Suez Canal Authority (SCA) for the sum of $916 million on 7 April 2021 to cover losses during the grounding of the vessel in the Suez Canal. According to Evergreen a $300 million is included in this amount for a salvage bonus and another $300 million for loss of reputation. According to Evergreen, the vessel will be held in Egypt until compensation is paid.  
Repercussions from the Suez Canal closure mean a surge of imports is set to hit European ports with vessels expected to arrive all at once. Following that, another wave is expected to hit Asia and the U.S. East Coast in the second half of April.

Multiple data analytics companies researched stating that Europe will be the most affected region by the canal blockage, while companies in Asia will be impacted by the delay of shipments from Europe and the shortage of empty containers returning to their region. The one-week blockage of the Suez Canal has wreaked havoc on liner schedules and many carriers have to improvise to re-instate punctual and regular service.
In the US, Port drayage is expected to further tighten in the coming month due to the Suez Canal blockage, with some truckers already booked out a month in advance.

Ever Given refloated

The salvage company leading the recovery operation has announced that the MV EVER GIVEN has been refloated around 1500 local time and is under tow to a safe location for vessel inspection. The outcome of the inspection will determine whether the ship can resume its scheduled service. While the vessel’s bow remained stuck on one side of the waterway this morning, the high spring tide this afternoon allowed salvors to re-float the entire ship and unblock the waterway after a week of closure. 

According to the Suez Canal Authority (SCA), the vessel will now be towed to the Bitter Lakes area for technical inspections, opening up the waterway for the resumption of traffic.
Shippers and forwarders on either side of the canal face weeks of potential supply chain disruption – according to Leth Agencies, there are 357 vessels of all types waiting to transit Suez, and estimates vary as to how long the backlog of vessels could take to clear.

Maersk customer advisory report confirmed the line and its 2M partner, MSC, have three vessels stuck in the canal system and another 30 waiting to enter and, as of today, had rerouted 15 ships round the Cape of Good Hope. 

THE Alliance has rerouted seven vessels via the Cape, and the Ocean Alliance four.

The current situation will likely have far-reaching consequences for container traffic. Maersk line estimates the cleanup of the Suez Canal will take at least six days.

According to the reports, 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 Suez Canal normally sees around 50 vessels transiting a day, although it is understood it has the capacity to handle double this number.

According to data from SeaIntelligence Consulting, Asia-North Europe vessels routed via the Cape need an extra 14.4 days to complete a round trip, while Asia-Mediterranean vessels take an extra 26.8 days.

It is evident that such an amount of capacity absorption will have a global impact and lead to severe capacity shortages. It will impact all trade lanes, as carriers will seek to cascade vessels to locations where they find they have the greatest need.

Crane World Wide Logistics will continue to monitor the situation closely and keep our clients informed as frequently as possible.  
Please reach out to your contact at Crane Worldwide Logistics if you have any questions here

Source: The Loadstar, Shippingwatch, Container-news

Ever Given container vessel grounded in the Suez Canal

The 20,000 TEU containership ‘Ever Given’ ran aground in Suez Canal at around 8 am local time March 23. This accident occurred at 6 nautical miles from the southern entry of the Canal as the container ship proceeded northbound through the waterway from the Red Sea. 

Despite efforts to re-float the vessel, Ever Given is continuing to block the Suez Canal adding further disruption.  

It has been confirmed that both Smit and Nippon Salvage have been appointed to help with the re-floating operation, with Smit experts expected to arrive at the scene later Thursday, sources suggest an assessment of the vessel's situation will not take place until Friday morning.

According to reports from Bloomberg, "Pictures now seen across the globe of the vessel spread fully across the canal, point to the first major hurdle. It ran aground both at the front and at the back, almost perpendicular to the canal walls. That’s leaving very little room to simply tow it away from either end."  

It could also see further damage to the vessel as the tides in the canal rise and fall creating some stress in the midships, but more damage and to the rudder and bulbous bow sections of the ship. It will also see the vessel become harder to shift as it becomes stuck faster in the canal mud. 

Furthermore, maritime sources suggest that the next high tide in the region will give the best chance of re-floating the vessel, but that will take place on Monday.
By mid-day Thursday there were over 200 vessels waiting (including 41 container vessels). 

About 12% of global trade goes through the canal. In addition, Containerized goods represent around 26% of total Suez traffic.

We will continue to monitor the situation closely and keep our clients informed as frequently as possible.  

Please reach out to your contact at Crane Worldwide Logistics if you have any questions here

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