Suez Canal Blockage

The last week of March 2021 sparkled global news regarding one of the world’s busiest

shipping routes in Egypt, the Suez Canal, involving a massive cargo ship Ever Given that has

completely blocked the passageway after losing the ability to steer amid high winds and dust

storms (Umut Uras & Usaid Siddiqui, 2021). This global chaos disrupted the normal

operations of the 12% of the world’s seaborne trade. It took six days of dredging, favorable tides

and a dozen tugboats pulling to free the vessel as reported by Bacon (2021) of USA Today from

March 23 to 29. Before the success of resolving the issue, JPMorgan warned that the prolonged

blockage could lead to significant disruptions to global trade, skyrocketing shipping rates, further

increase of energy commodities, and an uptick in global inflation. Analysts also highlighted

increased risk of attacks on oil facilities amid greater energy supply chain vulnerability and

regional tensions.

In line with the Suez Canal and Ever Given fiasco, reports show that the mishap

impacted crude oil prices as there were delays of 3 million to 5 million barrels of oil per day

since 5% to 10% of seaborne oil is transported through the Suez (Turak, 2021). Another article

published by New York Times shared that the cost of the disruption is at between $12 million

and $15 million a day, and it is also reported that the Suez Canal Authority will be conducting an

investigation to determine who’s responsible for paying it.

The corresponding analyses I dug out of several news sites strengthen the idea of the

issues and challenges within freight transportation as a heavy factor that negatively affects the

supply chain, economically. Given that the role of transportation in the supply chain is being the

one responsible for moving the products from one place to another and if problems arise,
product supplies are delayed that could lead to, reiterating what was stated in the previous

paragraph, significant disruptions to global trade and an uptick in global inflation.

References:

Turak, N. (2021, March 25). Suez Canal blockage could cause problems for the

globe: Here’s what you need to know. Retrieved from CNBC website:

https://www.cnbc.com/2021/03/25/suez-canal-cargo-ship-blockage-could-ca

use-problems-for-the-globe.html

Umut Uras, & Usaid Siddiqui. (2021, March 29). Stranded ship in Suez Canal

refloated: Live news. Retrieved from Aljazeera.com website:

https://www.aljazeera.com/news/2021/3/29/ever-given-turned-80-percent-in-r

ight-direction-live-news

Bacon, J. (2021, April). Suez Canal blockage: Captain of Ever Given not aiding

probe; calamity’s cost tops $1B. Retrieved USA TODAY website:

https://www.usatoday.com/story/news/world/2021/04/01/suez-canal-blockage

-egypt-could-seek-1-billion-ship-ever-given/4833205001/