The already strained global supply chain could not be in worse conditions at a time when the economy is gearing up for an expected post-Covid jump in consumer demand, assuming that the current vaccination campaigns and remaining lockdowns will stop the spread of the virus. Adding to the reported harbor congestion in East Asia and on the U.S. West Coast, European importers have been wondering when they would get their merchandise delivered via the Suez Canal after a six-day-long blockade that paralyzed the vital trade route March 23.
Their confidence was restored on Monday March 29 after reports from the area that the giant stranded Ever Given container ship operated by Evergreen Marine Corp. of Taiwan had been partially freed and refloated, raising hopes that the 360-plus vessels that have been queuing up to go through will soon be able to carry their merchandise to European destinations and to the East Coast of the U.S.
The Egyptian agency that runs the Suez Canal said Monday night that traffic had resumed in both directions. However, it will take days for it to go back to normal again. At any rate, it will certainly stress handling capacities for European ports and the related logistic infrastructures, which are already facing labor shortages due to social distancing measures. The global container shortage will be further aggravated as it will also take longer for the ships to return to east Asia.
Fortunately for our sector, it is the end of the spring/summer 2021 season in terms of deliveries, and most goods have already arrived. The accident is creating some late deliveries of initial products for the autumn/winter season, causing logistical space and warehousing problems for the brands.
The Ever Given came from Yantian, China and was headed for Rotterdam. Evergreen is blaming the Japanese company that owns the 1,312-foot-long ship for the unusual accident. It has asked it to investigate its cause, which has been reportedly attributed to the captain’s failure to cope with a dust storm.
There is unconfirmed speculation that Russian interests were somehow behind the accident. They have been suggesting an alternative Arctic route to transport merchandise from China to northern Europe, taking advantage of global warming. Nike and other important companies have publicly refused to consider such proposals in the name of their fight against climate change.
Nearly $10 billion worth of goods is estimated to be passing through the Suez Canal on an average day, representing around 13 percent of global maritime trade, which in turn accounts for.more than 80 percent of international trade.