Suez Canal Incident Another Test for Shaky Global Supply Chains

The closure of the Suez Canal in late March has highlighted what many people working in the petrochemical industry have talked about for several months – global supply chains are stretched almost to the breaking point following the events of the past year. The COVID-19 pandemic provided a sudden, sharp shock to logistics operations globally. For example, some merchant ships were barred from landing at ports for months due to concerns over the spread of COVID-19. When ports were re-opened, a shortage of labor including dock workers and truck drivers as countries entered various stages of lockdown caused long delays in loading and unloading ships. More recently, widespread shortages of not only shipping space but also containers and iso-tanks have led to massive increases in transportation and freight charges. Prices of shipping containers on some routes have increased more than 400% in the past year, according to published reports.

The mega container ship Ever Given ran aground in the Suez Canal on 23 March, prompting an urgent operation to re-float the ship and unblock the vital waterway for goods being shipped between Europe and Asia. Photographs of bulldozers and diggers, dwarfed by the enormous bow of the Ever Given, became a common site on news broadcasts for several days. The ship was successfully moved after five days of intense work, and the Suez Canal was re-opened to traffic soon afterward. An investigation into the cause of the accident was ongoing.

The impact on different markets is discussed in greater detail in the full article.