Unclogging the Suez Canal Crisis

By: Hayden C. Cordova | Managing Editor

Image courtesy of WIRED.com

The Suez Canal is one of the world’s largest international waterways, but traffic was recently brought to a screeching halt.  On March 23, the Ever Given shipping vessel ran aground into the side of the canal and horizontally blocked the entire channel.

According to the BBC, the vessel left 369 ships waiting for the ship to be dislodged by tugboats and land crew.  After six days of work, the Ever Given was finally announced by the Suez Canal Authority (SCA) as partially afloat on the 29, and the pileup of ships has started flowing through the channel again.

However, the incident has far greater repercussions than a simple traffic jam.  The Ever Given mishap has cost companies across the globe billions and could ultimately impact globalized trade for months.

While an estimate on the ultimate cost of the incident will have to wait until canal traffic returns to normal, nearly 12 percent of all global trade runs through the Suez Canal, amounting to about $9 billion in goods passing through the canal on a daily basis, according to CNBC.  The impact will largely come from “congestion at ports as well as vessels not being in the right place for their next scheduled journey.”  The BBC reported another cost may come from perishable goods needing to be reordered due to the weeklong backup. 

On top of this, the shipping trade has been affected by Covid-19 by being forced to meet the increased online shipping demand while following pandemic regulations.

As trade flow resumes, authorities now turn to investigate what caused the incident to begin with.  Although high winds were reported on the day of the event, The Washington Post reported that human error is a likely possibility as well. 

Whenever a vessel passes through the canal, the SCA requires two pilots under their authority to board the vessel and collaborate with the captain on guiding the ship through the channel.  The SCA plans to investigate their two pilots, but under Egyptian law responsibility due to human error would ultimately fall onto the captain of the Ever Given itself and its owners (Shoei Kisen Kaisha) and operators (Evergreen Marine).

Regardless of what is to blame, the incident also reveals how shipping through the canal has changed. 

 The Washington Post reported that “the job of navigating ships through canals had become more taxing in recent years. The vessels today are much larger and carry more cargo than those traversing the canal in the 1990s.”  

While the canal was widened in 2014 to accommodate this, the Ever Given is one of the world’s largest shipping vessels at 1,312 ft. long.  The increase in globalized shipping may force ships to reach this size in the future.

Whatever the case, despite the Ever Given crisis finally being averted, the future of the Suez Canal and shipping around the world remains uncertain in the coming months.