For six days, logistics was front and center as the world was captivated by what happened to the Ever Given. The first to notice was the global trade audience with cargo trapped on either side of the Canal who became increasingly anxious after a pandemic-filled year of supply chain rate increases and delays. A close second were global commodities traders who began to ponder the impact on the transport of oil and natural gas. The final audience were the mainstream collection of pedestrian consumers of news and the internet did what the internet does best – generating memes at a mind-boggling rate.

Fortunately, six days after blocking the Canal, the passageway is once again open to traffic while the Ever Given is towed to Bitter Lake (irony sometimes writes itself) for a technical survey and analysis. 

The salvage company reported displacing 30,000 cubic meters of sand and utilizing a total of thirteen tugs to free the vessel. Their press release quite tongue-in-cheek proclaims – rightly – that they pulled it off.

 

An Impending Global Shipping Ripple Effect

Despite happening a half a planet away to a vessel that was in-transit between China and Rotterdam and laden with more than 18,000 containers from building supplies to consumer products, these events have an impact on Americans, American companies and the supply chains which feed our economy, both for imports and exports.

Twelve percent of the world’s trade by volume passes annually through the Canal, and thirty percent of the planet’s container traffic transits daily. 

As of Monday morning when the Canal reopened, Egyptian authorities reported nearly 370 vessels of all kinds waiting to transit, including, “dozens of container ships, bulk carriers, oil tankers and liquefied natural gas (LNG) or liquefied petroleum gas (LPG) vessels.”

 

Impact on US Importers and Exporters

The knock-on effect to global container shipping will come several ways and US importers and exporters should expect the ripple effect it will cause to arrive in a few weeks’ time.

  • Some carriers, unsure of the time it would take to free the vessel, chose to travel around the southern tip of Africa, adding 10 – 12 days sailing time.
  • Whether taking the long route or waiting their turn to pass through the Canal, ship schedules will be disrupted and carriers may choose to omit port calls or blank future sailings to restore integrity.
  • The delays to not just cargo on board the Ever Given but for all container ships affected by the nearly week-long closure will further exacerbate global equipment shortages because of the delayed delivery of imports and the lack of containers available for either export or for return to Asia.

 

Mach 1 Global is monitoring the changes to vessel arrival and departure times that are immediately impacted by this delay and will remain in close contact with our contracted ocean carriers for changes to medium or long-term schedules that arise from this delay.

 

Image credit: Royal Boskalis Westminster N.V.

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