The Reality of the Impact on the Suez Canal Disaster

There has been much global media coverage of the Evergreen vessel blocking the Suez Canal, which thankfully has now been cleared. 

This event has and will continue to cause disruptions across the industry’s ocean networks having a direct impact on many customers’ supply chains. 

Important to raise awareness of the unforeseen consequences of the incident, as even though the channel has been opened allowing the passage of ships, there will be a number of ripple effects. 

Although at this point in time we are not certain about the size of the challenge, what we can say is that:

• Vessels across all shipping lines will now be attempting to arrive at their destination ports simultaneously - practically meaning there will be waiting time expected across ports

• The delayed vessels are out of their pro forma schedule and it will not be possible for them to catch up on positions without delays

• Stuffed containers are now in supply chains for longer periods, and vessels who were re-positioning empty containers are delayed – both leading to a container shortage in many locations

The net effect of the points mentioned above is that we estimate for the next several weeks, we will lose considerable vessel and equipment capacity to the tune of around 15-20% (of our global capacity). 

Whilst the larger effects will be on trading routes that go through Suez, the knock-on effects will be felt in other trades. 

In simple terms, we can expect that in some weeks from now certain services will have zero capacity due to missing vessel positions; and we will not be able to provide double the capacity in the following week.

Our Ocean Network and Markets teams are working fiercely to model the most effective way of getting our global network back into a robust setup, but this is a major challenge that will, unfortunately, take some time. In the meantime regret that SPOT and NOR acceptance have unfortunately had to be closed for the foreseeable future. 

Rolling’s, delays, and transit time increases,  will unfortunately definitely happen during this period, which I know is the last thing we all need after the last 9 months of shipping disruption – but we will do our utmost to support you and keep you fully updated.