'Suez Canal, Accounting for 12% of Global Trade... Ship Rescues Take Over a Week'

200,000-Ton Ultra-Large Vessel Ever Given
Stuck for Four Days
Efforts to Dig Out Sand and Rescue
Canal Repairs and Cargo Unloading Also Needed

[Image source=Yonhap News]

[Asia Economy Reporter Cha Min-young] As the ultra-large container ship blocking the Suez Canal, a key trade route responsible for 12% of global trade volume, remains stranded for the fourth day without moving, it is expected that the restoration of the Suez Canal will take at least a week. This is anticipated to cause disruptions across the global supply chain, including oil, grains, and automobiles.

Restoration of the Canal Expected to Take 1 to 2 Weeks

Bloomberg reported on the 26th (local time) that it is expected to take at least a week to rescue the 'Ever Given' stranded in the Suez Canal. This is a much longer period than the initially expected two days.

Randy Gibbons, Vice President of Marine Energy Research at Jefferies LLC, a U.S. investment bank, told Bloomberg in an interview, "Since some cargo unloading is necessary and repair work on the canal itself must be done, it could take at least two weeks before ship traffic can resume."

The vessel blocking the Suez Canal is the Ever Given, an ultra-large container ship with a capacity of 200,000 tons. The Panama-flagged Ever Given ran aground in the middle of the Suez Canal on the morning of the 23rd. The ship carries about 20,000 containers, with a total tonnage of 224,000 tons.

Removing the sand from the bow section is also expected to take considerable time. The Suez Canal Authority (SCA) stated that to move the Ever Given again, it will be necessary to remove 15,000 to 20,000 cubic meters of sand from the embankment at the bow section. This means excavating 12 to 16 meters vertically. The Canal Authority has deployed suction heavy equipment capable of removing 2,000 cubic meters of sand per hour and tugboats. The Dutch ship salvage company Boskalis has also been involved in the operation since the previous day.

Oil Tankers Decide to Bypass Cape of Good Hope

[Image source=Yonhap News]

The British daily The Guardian reported that as the reopening of the Suez Canal became uncertain, some cargo ships and oil tankers have decided to bypass the Cape of Good Hope in South Africa. The oil data provider Kpler also reported that three oil tankers have decided to bypass the Cape of Good Hope. Sixteen LNG carriers unable to pass through the Suez Canal have also planned to reroute. It is known that the Korean container shipping company HMM has instructed its container ships to bypass the Cape of Good Hope as well.

Bypassing South Africa’s Cape of Good Hope increases the route distance by about 6,000 miles (approximately 9,650 km). Bloomberg estimated that in this case, the fuel cost alone for large oil tankers transporting Middle Eastern oil to Europe would reach $300,000 (about 340 million KRW).

As the accident handling is delayed, the damage to about 150 ships stranded near the canal is snowballing. It is known that shipowners suffer losses of approximately $60,000 (about 70 million KRW) for each day of delayed navigation.

Concerns Over Inflation Rise

There are growing concerns in the market about inflationary pressures caused by reduced supply. Especially with active online consumption, it is expected that the impact on Europe, which heavily depends on Asian products, could be significant.

Chris Rogers, Senior Trade Analyst at S&P Global Market Intelligence, told Bloomberg, "Delays are likely to increase costs and put inflationary pressure on supply chains," adding, "Short-term ripple effects include increased chances of consumer goods inventory shortages and impacts on manufacturing supply chains that were shaken by Brexit in the past."

The Suez Canal is a 120-mile-long canal connecting the Red Sea in the Southern Hemisphere and the Mediterranean Sea in the Northern Hemisphere. Approximately 1 million barrels of oil, equivalent to 158.9 million liters, are transported daily through the Suez Canal. Besides oil, about 12% of international trade passes through the Suez Canal.

This content was produced with the assistance of AI translation services.