When Ships Run Aground

Six days into its ordeal, the Ever Given was set free.

The Japanese-owned container vessel, loaded with 20,000 shipping containers, became wedged sideways while traveling through the Suez Canal.

While the ship went on its way and the canal reopened to traffic, the impact of a six-day stoppage in marine transport in that canal meant a massive disruption to supply chains across the world. The 120-mile canal sees roughly 12% of the world’s tonnage transported through its waters — an average of 50 ships per day. When the Ever Given became stuck, all of those ships waiting to get through the canal became stuck, as well.

Almost immediately, supply chains began to feel the impact. The price of liquid natural gas increased. Even after the ship was freed, gas, oil, food, consumer electronics and more will most likely see losses associated with delayed shipments, particularly those that were time-sensitive, such as perishables and items associated with holidays.

The impact went even deeper. The Suez Canal Authority was also impacted. Early estimates set losses at $14 million to $15 million USD per day that the ship blocked passage. Egypt reportedly lost up to $14 million per day in revenue. Lloyd’s List data show that the blockage held up an estimated $9.6 billion in goods per day.

Had some of the ships been forced to reroute around the Cape of Good Hope in southern Africa, the additional 8.5 days of travel could have further added to the costs. The canal is a major thoroughfare for goods moving between the Far East and the western markets. Without it, the price of shipping increases, as does the price of goods.

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