The massive container ship Ever Given was finally freed after it had been stuck in the Suez Canal for the past seven days, blocking billions of dollars’ worth of cargo from crossing one of the world’s busiest marine waterways. The strategically important waterway that carries an estimated 12% of the world’s trade. For five long days and nights, the team of Egyptian, Dutch and Japanese workers dredged huge amounts of sand and attempted to pull the 220,000-tonne vessel free using nearly a dozen ordinary tugboats – revealing yet another major weakness of the global supply chain.
The Ever Given jam, which went from plain sailing to being grounded in the Suez Canal, was a fitting incident for our lockdown era. That the gargantuan cargo ship, a muscular symbol of global trade, was hindered not by an invisible virus or economic forces, but by simply getting stuck, was reassuringly simple. The boat was too big, or the canal too small, and the result was a costly blockage of global shipping. “The global shipping industry operates under intense pressure,“ according to Albert de Hoop, the former mayor of Ameland in the Netherlands. „Stretched crews, ageing materials and tight deadlines create a toxic mix of influences that will continue to create dangerous situations at sea and along our coasts.” And while the Ever Given saga may on the surface seem like an amusing distraction, its economic impact is severe – the blockage was estimated to cost $9 billion per day.
But where there were losers, there are also winners who benefit from this situation. For example, the Greek shipowning community, which controls more than a fifth of the world’s ocean-going merchant fleet and more than half of the EU fleet, is poised for a potential bonanza in escalating rates. That is because hiccups in global supply chains have historically tended to raise freight rates and shipowners’ profits, though for those on the other side of the deal, the charterers, such interruptions can be extremely costly. “This crisis led to a lot of losses for freight owners and charterers,” says Ioannis Theotokas, professor of maritime studies at the University of Piraeus. While the Suez Canal incident has now been resolved, it shone a light on a potential weakness in how raw materials, components and finished goods are transported through strategically important choke points with possibly severe implications for the global economy.
