Even for China, the numbers are mind-numbing.
Already the floundering Ever Given mega-container ship in the Suez Canal has held up US$400 million worth of trade each hour since running aground earlier this week.
For each day, the global figure balloons to $9.6 billion, data from the London-based shipping news journal Lloyd’s List has revealed. More than 60% of China’s high-tech products to Europe are shipped through the man-made waterway, which separates North Africa from Europe. It also acts as a maritime gateway to Asia.
“If the Suez Canal cannot resume smooth cargo flow in two or three weeks, it will eventually push up freight fees, which have already remained at a high level since the second half of last year during the [Covid-19] pandemic,” Wu Minghua, an independent shipping industry analyst based in Shanghai, told the state-run Global Times.
Concerns are growing that it could take weeks to free the 400-meter long and 200,000-tonne Ever Given, shipping analysts have warned. At least 160 vessels are waiting at both ends of the canal, including 41 bulk carriers and 24 crude oil tankers.
“We’re hearing reports now that shipping companies are starting to divert their ships around the southern tip of Africa, the Cape of Good Hope, which adds about 3,500 miles to the journey and up to 12 days,” Guy Platten, the secretary-general of the International Chamber of Shipping, told the BBC’s Today program.
- The Ever Given carries 20,000 containers and is longer than the height of the Eiffel Tower.
- It is operated by the Taiwanese company Evergreen Marine.
- About 30% of the world’s shipping container trade goes through the 193-kilometer canal on a daily basis.
- That works out at about 12% of the total global trade of all goods.
- Chinese ships account for one-tenth of the annual total.
- The Suez Canal Authority reported that nearly 19,000 ships passed through the canal last year.
- That is an average of 51.5 ships per day.
What was said: “It’s another big blow to global trade in an already backlogged and battered supply chain year. The vessel has single-handedly put a stop-block in both directions to that vital trade route between Asia and Europe,” Jett McCandless, the chief executive of logistics research group project44, told the South China Morning Post.
Delve deeper: The logjam will highlight the shortage of container space in China. “Containers are already scarce in [the country] and the backup in the Suez Canal will further stress the inventory. We are back to a pre-Chinese New Year environment where factories are running at full steam and are struggling to find containers, as well as space for their finished goods,” Jon Monroe, a maritime trade and logistics consultant with Jon Monroe Consulting, told the CNBC network.
China Factor comment: The Suez Canal took 10 years to build and was finished in 1869. But at the time, it was never envisaged to take the sheer size of today’s container ships and tankers. In 2014, work began to expand the Ballah Bypass section from 61 meters wide to 312 meters. It was finished a year later at a cost of $9 billion. Even so, this latest incident has proved that problems still exist when it comes to these man-made monsters of the sea.