Suez-Originated Logistics Crisis, Next 24 Hours Critical... Domestic Companies Also on Alert (Comprehensive)

Suez Canal Salvage Operation Accelerates Amid High Tide... "50% Success Rate"
Hyundai Glovis, Pan Ocean Decide to Bypass South Africa... Approximately 7 Days Delay

[Asia Economy Reporters Heungsun Kim, Hyunwoo Lee, Dongwoo Lee] As the blockade of the Suez Canal, the global logistics artery, enters its sixth day, the scale of damage is snowballing, while the salvage operation of the stranded vessel remains at a standstill. Although Egyptian authorities have declared that the ship will be salvaged within 24 hours, experts deployed at the accident site are reportedly estimating the success rate of the salvage operation at around 50%. Following major domestic and international shipping companies announcing their plans to use the South Africa detour route, manufacturing companies are also on high alert over concerns of a logistics crisis due to the prolonged blockade.

According to foreign media including Bloomberg, on the 28th (local time), the Suez Canal Authority (SCA) of Egypt stated in a press release, "Today, the water level around the Suez Canal will rise to its highest level due to high tide, and the salvage operation over the next 24 hours is crucial." The plan is to accelerate towing and dredging work during the high tide to ensure the stranded vessel is salvaged.

However, experts at the accident site estimate the success rate of this operation at about 50%. According to CNN, Peter Berdowski, CEO of Boskalis, the world's largest underwater dredging company involved in the salvage operation, said in an interview, "We estimate the success rate of this salvage operation to be around 50%," adding, "If we miss this high tide opportunity, it will be difficult to predict how many days or weeks it will take to remove the Ever Given."

As the blockade nears a week, the logistics damage is snowballing. According to CNBC, the shipping industry is suffering losses of $9 billion (approximately 10.1655 trillion KRW) per day due to delivery delays caused by the Suez Canal blockade, and shipowners of each vessel could lose $60,000 per day. It is reported that currently 429 vessels are waiting for the canal to reopen.

◆ Major Shipping Companies Successively Detour South Africa... Freight Rate Increase Inevitable

[Image source=EPA Yonhap News]

Major domestic shipping companies have also announced route changes one after another. Hyundai Glovis finalized on the 29th the decision to detour around the Cape of Good Hope in South Africa for irregular vessels. Hyundai Glovis's vessels bound for Europe from the Far East were originally scheduled to pass through the Suez Canal and call at major European ports such as Koper, Slovenia.

Pan Ocean, which mainly operates bulk carriers, is also reviewing whether to detour vessels currently heading to the Suez Canal. Pan Ocean currently has about four vessels scheduled to pass through the Suez Canal this month and plans to make a final decision on route changes within 2-3 days after monitoring the local canal restoration process. Earlier, HMM, the largest domestic shipping company, also decided to detour around the Cape of Good Hope instead of the Suez Canal.

Signs of rising freight rates have also become clear. The Shanghai Containerized Freight Index (SCFI), a global container ship freight rate indicator, recorded $3,742 per TEU (1 TEU is one 6-meter container) on the Europe route as of the 26th, up $77 from the previous week. A domestic export industry official said, "Recently, container box prices soared due to supply-demand imbalance on the US route, and now with the Suez Canal blocked, there are concerns about export disruptions even to Europe."

◆ Oil, Automobile, Home Appliance Export-Import Companies "Monitoring the Situation"

[Image source=EPA Yonhap News]

According to the Korea International Trade Association's International Trade Research Institute, last year, the proportion of exports by domestic companies shipped by sea to the European Union (EU) region passing through the Suez Canal was 73.4% of the total ($325.8 billion). This ranks fourth after the Commonwealth of Independent States (CIS, 91.6%), Latin America (82.9%), and Japan (79.9%).

In particular, the proportion of maritime transport for petroleum products (100%), automobiles (99.9%), ships (99.6%), and petrochemical products (99.3%) is absolute, so the impact is expected to be significant. An industry official said, "The volume of crude oil passing through the Suez Canal accounts for about 10% of the world's crude oil, which is not insignificant," adding, "There is an increased possibility of fluctuations in crude oil and petroleum product prices."

Most of the domestic steel products exported to the EU also pass through the Suez Canal. Last year, the average monthly export volume of steel products to the EU was about 200,000 tons. A steel industry official said, "There may be impacts on delivery times, so we are closely monitoring the local situation."

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