Tag: Global Trade

The Ever Given, a 220,000-ton mega ship

The Suez Canal Crisis

The giant cargo ship named Ever Given which was stuck in the Suez Canal in Egypt has finally been rescued. As per the report, the ship was freed on March 29, 2021, a week after it ran aground blocking other ships from transiting.

The head of the Suez Canal Authority (SCA), Osama Rabie announced the resumption of traffic in Canal. Former SCA chairman, Mohab Mamish also expressed his joy over this topic by saying “I am well and truly overjoyed, we were able to get out of a very tight jam”.

On social media too it became a trending topic. People (specifically Egyptians) greeted the news by sharing various memes. A Suez Canal employee named Ahmed Abbas, shared live footage from the spot on his Facebook account, writing “Praise be to God, the vessel is finally out! Well done to the SCA boys!”. 

How did it happen?

The large cargo ship weighing 2.2 lakh tons, 400m long, 59m wide which was carrying 18,300 containers got stuck diagonally while entering the Suez Canal from the Red sea. It disrupted  12% of the world’s seaborne trade causing a heavy traffic jam with more than 400 ships waiting to enter the canal.

Reason for this cause

However the complete data of investigation has not come out yet, but it is said that strong wind or human and technical error could be a reason.

Impact of this saga on global trade

The 193 km(120 miles) long canal that links the Mediterranean Sea to the Red Sea. It separates the African continents from Asia and provides the shortest maritime route between Europe and the lands around the Indian and western Pacific oceans, which allows the container ships to avoid long trips around the southern part of Africa. 

According to the renowned shipping journal Lloyds’s list, goods worth $9.6 billion pass through the canal every day. Lloyd says that on average 50 ships get across the canal each day, carrying 1.2 billion tons of cargo.

Several Eastern and western nations have suffered an annihilative economic blow due to the canal blockage. Hundreds of ships carrying goods worth billions were either stuck or forced to take another route, causing significant delays and more shipping costs. Even India has faced a loss of several hundred crores due to this.

Countless retailers around the globe have suffered losses due to the blockage as their shipment was delayed. Ships carrying a large amount of fuel and cargo, have been blocked raising a serious downfall on the global supply chain.

Since the canal route got disrupted for a week by the Japanese-owned ship, the overall trade loss has been estimated roughly around $54 billion

More things to look upon

However, the crisis is not completely resolved yet. The blockage is going to cause a ripple effect on global trade due to the imbalance in shipment time. It was already an imbalanced situation due to the Covid-19 pandemic, and now the blockage has aggravated the situation.

G Raghu Shankar of the Chennai-based International Clearing and Shipping Agency stated that “We can expect a hike in freight rates soon”.

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