SUEZ CANAL INCIDENT STATUS UPDATE

As is widely reported in the Global media, the very large container ship “Ever Given“ was grounded during transit in the Suez Canal on Tuesday, March 23, completely blocking the canal for the passage of other vessels. So far, all attempts to re-float the vessel have been unsuccessful, and it is currently unknown how long the process will take to free the Ever Given and open the canal due to the difficult nature of the operation. Multiple salvage teams are en route to join the efforts; however, some reports state that it will take several days, maybe even weeks to resolve the situation.

As the Suez Canal is the main trade artery between Europe and Asia, this will have significant impacts on what is already a challenging situation in terms of vessel delays, congestion in many ports and container shortages driving freight rates to record high levels and space on vessels at a premium.

According to the most recent figures, there are well over 200 vessels of all types currently stalled at either end of the canal awaiting transit, with an estimate of over 300,000 TEU’s on these vessels alone. Some carriers are already starting to re-route vessels around the Cape of Good Hope to avoid the Suez. However, this will add a further 7-10 days to the transit time as well as higher fuel costs and will absorb a lot of capacity. In a typical week, around 70-90 container ships would transit the Suez. Carriers are presently still making contingencies and deciding whether to re-route vessels or wait for the blockage to be cleared. Information will be circulated once available.

The inevitable consequences of this incident, coming on top of already stretched Global supply chains will be:

• Delays on vessels on all Asia – Mid East – Europe services, on top of already very poor schedule reliability
• Vessels will be out of position for return voyages which may result in blank voyages in Asia in the coming weeks to get schedules back on track
• Empty containers will be in even shorter supply as it takes longer for the laden containers on vessels to be resituated and returned
• Demand will be high in the coming weeks and may push rate levels even higher than the extreme levels we see today
• Some urgent cargoes may switch to airfreight putting further pressure on capacity and rates

Noatum Logistics is monitoring our underlying ocean carriers’ announcements identifying impacted vessels. Customers will be notified of any shipments delayed in transit.

More information and updates to follow as available.