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Global shipping lines began to redirect cargoes away from the Suez Canal as the blockage of the crucial international waterway by the affected vessel Ever Given entered a fourth day.
With the stranded ship containing around $ 9.5 billion in cargo in massive traffic jams at either end of the canal, seven tankers carrying liquefied natural gas (LNG) were hijacked on Friday after the blockade resulted in traffic being suspended in the Suez Canal.
Three of the tankers were diverted to the longest route around Africa, via the Cape of Good Hope, data intelligence firm Kpler said, adding that the majority of the hijacked tankers originally destined for the Canal de Suez were now headed elsewhere.
“In total, the planned transit of 16 LNG ships through the Suez Canal will be affected if congestion persists until the end of this week,” said Rebecca Chia, a Singapore-based Kpler analyst.
As of Friday morning, the vessel was left stranded in the same position, with tugs and dredges still working to free it, according to Canal’s service provider Leth Agencies.
An unnamed Egyptian Channel Authority official told The Associated Press that the bailout operation was “a very delicate and complicated” operation that must “be handled very carefully.” They wanted to avoid “any complications” that could prolong the closure of the canal.
Canal authorities said Thursday night they would need to remove between 15,000 and 20,000 cubic meters (530,000 to 706,000 cubic feet) of sand to reach a depth of 12 to 16 meters (39 to 52 feet). This depth is likely to allow the ship to float freely again, he said.
At least four Long-Range 2 tankers that could have headed for Suez from the Atlantic Basin were now likely to assess a passage around the Cape of Good Hope, London naval brokers Braemar ACM said on Friday morning. Each LR-2 tanker can carry around 75,000 tonnes of oil.
International shipping company Maersk said on Friday it was “considering all alternatives” for its nine container ships stranded in queues.
“Everyone is making contingency plans as we speak,” said Peter Sand, chief shipping analyst at BIMCO, according to CNN.
Egyptian authorities will continue to work with rescue teams around the world on Friday to free Ever Given, which lodged in the southern section of the canal on Tuesday when it lost control in a storm.
Tugs were unable to free it and efforts to dig up the bow with excavators were unsuccessful.
Experts fear the huge Panama-registered ship, which is 400m long and has a gross tonnage of nearly 220,000, has stuck so far in the sand on either side of the canal that it it might not be possible to dislodge it without removing some of its cargo.
Such a process could take weeks, according to Peter Berdowski, managing director of Boskalis, a specialist dredging company that sent a team to the scene.
“The impact on the global supply chain due to the blockage of ships in the Suez Canal depends on how long the route remains impassable,” Maersk said in a statement Friday. “We are closely monitoring the bailout operations and are currently studying all possible alternatives.”
Agence-France Presse also reported that Maesk’s main international rival, Hapag Lloyd, was considering sending shipments around the Cape of Good Hope at the southern tip of Africa to ensure that the goods could reach Europe without further delay.
As of Friday, more than 200 ships were stranded at the northern and southern ends of the canal. Originally built in the 1860s, the northern section was extended into two lanes in 2015, but the southern section where Ever Given is stuck is only one lane.
About 12% of all world trade passes through the 193 km (120 mile) long canal, which allows tankers and container ships between Asia and Europe to avoid a long trip to Africa.
Lloyd’s List, the shipping data and information company, estimated on Friday that $ 9.6 billion worth of goods pass through the canal every day. Lloyd’s says about $ 5.1 billion of this traffic went west from the Red Sea to the Mediterranean and $ 4.5 billion went the other way.
About a quarter of this traffic is carried on container ships – like the one that is now buried in a side wall of the canal. Lloyd’s said more than 50 ships pass through the canal on average per day, carrying around 1.2 billion tonnes of cargo.
Flavio Macau, senior lecturer in supply chain management at Edith Cowan University in Western Australia, said it made sense for Maersk and Hapag-Lloyd to consider re-routing their shipment because of longer delays at Suez could be expensive.
“If you go to Suez, you might expect to be 20th or 30th in the line, maybe because there are around 50 ships in each direction each day,” he said. “But now you could be number 250, which means you’re going to wait 3-4 days to pass even when it reopens.
“So they have to calculate whether they think the delays will last longer, and whether they want to risk waiting another 3-4 days to get through or instead go around Africa.” It takes 7-10 days longer, but there is less risk and certainty of arriving in Europe. “
There were also concerns that the situation in Suez could exacerbate problems for an international supply chain already under pressure from the pandemic and increased purchasing.
The virus restrictions have trapped the crews of the merchant ships. Congested ports led to container ships anchoring off the California coast, unable to dock and unload their cargo. Shortages of semiconductors and rare earth elements have hit manufacturers of cars and other consumer products.
“We have a lot of things indicating a vulnerable supply chain at risk of disruption, and now you add one more thing,” said Julie Swann, a logistics expert at North Carolina State University.
Jena Santoro, supply chain risk intelligence analyst for Everstream Analytics, said the blockage “could further exacerbate excessive congestion at European ports if cargo arrives at the same time.” It could also have a ripple effect by creating a shortage of unreturned containers in China.
The reaction of financial markets to the prospect of commodities being delayed by several weeks has been subdued, although the price of oil rose when Friday’s trading day began in Asia. Brent was up 43c, or 0.7%, to $ 62.38 a barrel at 0028 GMT, after falling 3.8% on Thursday.
Macau said that while the delays would hurt those directly involved, such as the Egyptian government, homeowners and insurers, the overall damage was not critical.
“We are seeing a loss of efficiency. But we don’t lose all ships, all cargo, or all shipping routes. We can redirect the flow, but it’s important to remember that there is no stopping production or demand. It’s not the zombie apocalypse like some have said.
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