The world has not even recovered from the coronavirus pandemic, yet we found ourselves stuck, or rather a gigantic container ship ran aground got stuck in the Suez Canal on 23rd March 2021.
The Ever Given, a Japanese operated by the Taiwanese Company Evergreen Marine, is one of the world’s largest shipping container vessels with a carrying capacity of over 18,300 cargo containers.
These seem to be tough times for supply chain and business leaders and the global trade. First the pandemic, now this blockage on one of the most important marine transportation artery of the world.
What is the Suez Canal and why is it so important?
The Suez Canal is an artificial waterway in Egypt that connects the Mediterranean Sea to the Indian Ocean via the Red Sea. It enables a more direct route for shipping freight between the continents of Europe and Asia.
The canal is considered to be one of the longest canals in the world, making it an important pathway for transportation for trade and commerce globally. It required 10 years to be constructed and was formally opened on November 17, 1869. Connecting the Mediterranean ocean with the red ocean by a waterway traces back to 40 centuries, however, the idea emerged during the period of the Pharaohs of Ancient Egypt.
The first modern effort to build a canal came in the late 1700s, during Napoleon Bonaparte’s Egypt voyage. The next endeavor to construct a channel in the territory happened during the 1800s when a French negotiator and architect, Ferdinand de Lesseps, persuaded the Egyptian emissary Said Pasha to help the structure of a waterway. An international team of engineers drew up a construction plan, and in 1856 the Suez Canal Company was formed and granted the right to operate the canal for 99 years after completion of the work.
About 12% of world trade passes through the canal each year, transporting everything from crude oil to grains to instant coffee to much more. An estimated 19,000 ships move through the passage every year. When measured daily, an average of 51.5 moves through, at an approximate value of $3 billion.
In 2015 the Egyptian government opened a significant extension of the Suez Canal and by building a 22-mile channel corresponding to the fundamental stream, at an expense of around $8.2 billion.
The development considered two-path traffic along with the majority of the course and for bigger vessels to travel. This made the canal more fundamental as it is one of only a handful few ways in the world that is adequately huge to accommodate the world’s biggest container ships and is one reason why the Suez Canal is so significant.
What led to the closing of the Suez Canal almost half a decade ago?
The Suez Crisis started on October 29, 1956, when the Israeli military drove into Egypt toward the Suez Canal after the then Egyptian president Gamal Abdel Nasser nationalized the canal, a significant stream that controlled 66% of the oil utilized by Europe. The Israelis were then joined by British and French forces, to regain control of the canal and for the powerful nations of the west. The crisis ended when the superpowers had to accept their defeat under pressure from the United States, the Soviet Union, and the United Nations. More than 15 ships were stranded in the Suez Canal for 8 years from 1967 to 1975. These ships belonged to many powerful nations of the world, including the UK, USA, France, Germany, and many more. These ships were christened with the nickname, “Yellow Fleet” because of the desert sand that covered them completely changing their color to mud yellow.
In 1975, the Canal was reopened, allowing the boats to depart following eight years of being abandoned. Around then, just two vessels were fit for moving under their force.
The Suez crisis and its aftermath indicated the end of Britain and France as global superpowers as their influence weakened with the United States and it gave a spot to the Soviet Union into taking on a more active role in affairs.
What went down at the Suez Canal in 2021 that became an international issue within hours?
On March 23, the entire Suez Canal came to a standstill. The Ever Given, an enormous ship, one of the largest in the world, ran ashore and got stuck in the Suez Canal. Struck by high breezes and with helpless visibility, it steered into the rocks, and the authorities struggled to free it for quite a long time.
Ever Given is a massive 400m wide ship. It being stranded on the Suez Canal caused a traffic jam so vast in the Canal that none of the ships could go anywhere, making the number of ships detained during their journey to a whopping 400!
On the morning of March 23, a solid desert storm whipped over Egypt’s Sinai Desert, which is said to have set off the Suez Canal emergency. An intense dust storm moving at a speed of more than 55 kmph beat the Suez Canal that day. Supposedly, the presence of unnecessary residue made the Ever Given go amiss from its course and get grounded diagonally close to the southern finish of the canal.
“This accident occurred at 6 nautical miles from the southern entry of the Canal as the container ship proceeded northbound through the waterway from the Red Sea. Gusting winds of 30 knots caused the container ship to deviate from its course, suspected leading to the grounding.” This statement was made by Evergreen Marine Corp, the Taiwan-based company operating the ship.
The ramifications caused by this sudden mishap had to be serious. Shipping experts have estimated the cost of the losses incurred to be almost $10 billion, which is not at all aninsignificant amount. They have also said that the backlog caused due to this congestion could take up to weeks to get cleared, which implies that the supply chain industry has incurred huge damages.
The ship in itself contains a heavy supply of things from food to furniture in around 18,300 compartments. At whatever point the vessel is obstructed, the lone alternate way to go is a long diversion through the Cape of Good Hope, which incorporates around 15 days of extra travel time.
How was the container vessel freed and what all steps were followed?
The Ever Given is a 1312 feet wide ship and weighs 200,000 tons, having a capacity of up to 20,000 shipping containers. Before it got stuck in the Suez Canal due to a dust storm, it was supposed to transport cargo from China to the Netherlands, hence it was following the route via the Suez Canal as it is the shortest way to reach the continent. The canal was blocked on 23rd march on both sides due to the enormous ship that had been stuck due to high winds and a dust storm that caused poor visibility, leading it to run aground and getting jammed between the wide ends of the canal.
Salvagers had attempted a few cures: pulling the boat with towing boats, digging under the frame, and utilizing a front-end loader to uncover the eastern embankment, where the bow was trapped. However, the vessel’s huge size and weight – 200,000 metric tons – had put forth those rescue attempts troublesome.
As tugs struggled in their attempts to move the ship through the week, dredgers were then brought in to dig mud and sand from under the bow and stern of the ship.
The successful combination of these tugboats and dredgers was what helped in moving the ship effectively.
Prolonged impact of the blockage on international trade
The abandoned ship had stopped all traffic across the trench, with specialists at first dreading it could require a long time to free it and clear the blockage of a course that represents around 12% of worldwide trade. The Suez Canal normally permits 50 freight vessels to pass every day between the Mediterranean and the Red Sea, giving a crucial exchange corridor among Europe and Asia.
The rescue operation had intensified in both urgency and global attention with each day that it stayed stuck, as ships from around the world, carrying vital fuel and cargo, were blocked from entering the canal during the crisis, raising panic over the impact on global supply chains.
A prolonged blockage of the canal could lead to temporary shortages of finished goods throughout Europe. It would also impact the shipping container industry as there would be a lesser amount of shipping containers available. The shipping containers were already facing shortages due to the pandemic as well as due to the spike in sea freight demand and the more complex logistics associated with this method of shipping that has further aggravated the issue.
Shipping rates for oil product tankers nearly doubled after the ship became stranded, and the blockage had disrupted global supply chains, already strained by Covid-19 restrictions, as reported by Reuters news agency.
What could have been done to avoid such a mishap?
Although there is still no clarity about what exactly caused the ginormous ship to get stuck in the Suez Canal, making it an international reason to worry, there is an ongoing investigation about whether the ship ran aground due to the windy tides, or if there was a human error that caused the whole mishap. We are still not sure what exactly the reasons behind all this were, but we sure did learn a lot of lessons on how to avoid such an event from occurring and the ways around it for the future.
The crisis had a major negative impact on the global supply chain management and has caused damages to many huge corporations that were sending and receiving goods on the shipping containers, especially the Ever Given, that was carrying shipping container to the Netherlands.
This grave situation also highlighted that the companies that are involved in the process of shipping goods via cargo containers should have contingency plans for any such sudden circumstances.
The best practice for responding to and dealing with a crisis is to always be prepared for the unexpected. Even though the ship finally refloated in the wee hours of Monday, 29th March 2021, after being trapped in the canal waters for almost 6 days, the world economy suffered losses of over $10 billion each day the ship was stuck, causing a lot of shipments to be delayed.
The Suez Canal blockage didn’t just influence the worldwide shipping industry. Numerous organizations, from local vehicle suppliers to retailers, general stores, and manufacturers are likewise affected.
Helped by a taskforce of towing boats, the ship was towed north towards the Great Bitter Lake, the broadest part of the canal, so it very well may be additionally investigated so the overdue traffic could once again continue with their operations.
The moment the ship regained its buoyancy, it was a defining moment in one of the biggest and most extreme rescue tasks in present-day history, with the whole world trade and its smooth functioning completely dependent on it.