Suez Canal Blockage Holds Up $9.6 Billion In Daily Shipments

Global companies have started rerouting cargo shipments to avoid the Suez Canal as analysts predict that the blockage caused by the grounded cargo ship Ever Given may not clear until after a few weeks.

On Friday, which was the fourth day of the crisis, seven tankers conveying liquefied natural gas had to be diverted. According to Kipler analyst Rebecca Chia, about three were diverted towards the longer route around Africa via the Cape of Good Hope.

The cargo ship Ever Given has been grounded in the Suez Canal for weeks and this is forcing other firms to reroute their cargo.

Chia said “a total of 16 LNG vessels’ planned transit via the Suez Canal will be affected if the congestion persists until the end of this week. She also added that due to the resulting congestion, there will be significant delays in the loading schedule at Ras Laffan from the beginning of April.

The 400-metre Ever Given ship sot stuck in the Suez on Tuesday morning after it lost power and ran aground, blocking the whole width of the canal. Efforts by Dutch and Japanese engineering teams to dislodge the ship began on Thursday, while Egypt put all navigation within the canal on hold.

The backlog which resulted from the blockage has sparked fears of piracy in the unstable regions surrounding the canal as ships are forced to remain static. As shown by Lloyd’s List tracking data, over 160 vessels paused at either end of the canal; that includes 41 bulk carriers and 24 crude tankers.

The Suez Canal is one of the world’s busiest waterways; an artificial sea-level channel in Egypt that connects the Mediterranean Sea to the Red Sea.

Experts expect its blockage to have an extremely negative impact on global trade. According to shipping data, approximately 13% of the world’s trade flows through the Suez Canal – an average of $9.6 billion per day.