The cost of one stuck ship in the Suez Canal – rising costs of fuel, household goods, food

[PeteC]

This is a very big deal as the article explains. If you think you've had trouble finding a foreign product in the food or department stores here, it's going to get worse, and expensive. Very unlucky is the expat who may be trying to ship household goods home to the UK or EU, or to here, during this period.

This would normally be a Current Affairs post, but we will feel and see the effects here without a doubt.

https://thethaiger.com/hot-news/economy ... goods-food

That container ship is still stuck in the Suez Canal. It’s created a huge traffic jam at either end – some 240 ships. Even if they clear the blockage (get the ship out of the way to let other ships pass) soon, it’s predicted to take most of April to clear the backlog. The cost to world shipping has been estimated at 9-10 billion US$ each and every day.

The Ever Given is 400 metres long, about as long as the Empire State Building is high, and weighs 200,000 tonnes. The ship ran aground, stuck sideways in the Canal, last Tuesday with high winds and a sandstorm affecting navigation.

Not going to affect you? Think again.

The Ever Given has become Very Stuck and is delaying the shipment of goods from Asia to Europe and North America, and back the other way, through the world’s busiest shipping channel, handling some 12% of the world’s shipping traffic. Despite the ship’s rudder and propellor being cleared, the ship is still firmly wedged in place.

Apart from a whole variety of household goods waiting to get through, there’s also oil tankers and livestock waiting patiently for the vital sea-route to be unblocked. Crude oil markets have already added 3% increase to the price per barrel in reaction to Ever Given’s not-going-anywhere-fast situation.

Pre-Ever Given, there was already a shortage of ships and containers as the world, unable to physically fly from here to there, have been spending their disposable income on online shopping, stretching global supply chains to the limit. Whilst passenger planes were quite easily converted to cargo planes, taking up some of the cargo slack, the world’s shipping fleet was already hard at work. Spare containers were few, ports were congested. In some of the world’s busiest ports – from Shanghai to LA, Singapore to Busan, Bremen to Laem Chabang – ships have been at anchor, for longer, waiting to be unloaded in recent months (7 out of the top 10 world’s busiest container ports in the world are all in China).

Even if there is a sudden move to air freight or alternative routes, the impact of either solution will quickly add to the costs of transporting goods globally.

Although manufacturing was hard hit in the early days of the pandemic, the pickup later in 2020, both in manufacturing and our demand for goods (furniture, TVs, inflatable pools, exercise machines, electronic and gaming gadgets, and clothing) has stretched the supply chain and contorted it as companies re-aligned those chains and sought new markets (remember the US-China trade spat was all happening at the same time last year).

This unexpected consumer demand has shot up the cost of moving the standard 40 foot container. The average cost to ship just one container has gone up from US$1,040 in June, 2020 to $4,570 at the start of March, 2021, according to S&P Global Platts. Guess who will eventually pay for the additional costs of shipping? And the current blockage will only exacerbate the problem, making shipped goods more expensive, faster.

The current, and unscheduled, closure of the the Suez Canal will cause shortages of products, from agricultural products, livestock to computer parts, car parts, wines and all smartphones coming out of Asia. The list of affected goods is long.

The obvious solution (try another route) will just delay shipping longer and further delay the arrival of ships and containers. The longer routes also add additional cost. The return journeys will also be delayed, etc, etc. About 80% of the world’s total trade, by volume, travels by sea.

There are also some key indicators which could be hugely affected by this one ship blocking the Suez Canal. The ‘Fed’ (the US Federal Bank Board) has been fearful of inflation kicking in which could trigger a number of financial pillars – one being a shock to the US stock market. Rising costs will put additional pressure on inflation and leave the Fed less room to move to counteract any major reversal in the US share market.

So the entire world can expect both rising prices for many goods and delays in anything that’s coming from overseas by ship. That this situation may happen sooner rather than later will be the fault of one stuck container ship.

SOURCES: Sky News | CNN | New York Times | Wikipedia

[HHTel]

Well the world survived an 8 year closure back in the day. I was part of the survey crew mapping new routes around the cape. It could set shipping trade back for some while.

[Big Boy]

As soon as I saw the incident I said to family that it was probably going to increase the lead time on my new laptop

[Dannie Boy]

Not if it’s coming from China!!

[HHTel]

Before this, there was an increasing number of ships already using the route around the cape to avoid the massive cost of tarrifs going through the Suez.

Ships are already diverting because of this blockage.

I reckon that it'll be 'temporary', although that would mean some weeks.

[Big Boy]

It won't matter what route it takes, suppliers will use this card as it suits.

[handdrummer]

We'll be buying fewer imports, from food to hard goods.That will lower my cost of living, not a bad thing. I'm well past the age of wanting "stuff' and my needs are few. For others it will be more difficult.

[buksida]

Rising costs of food, fuel, and households will happen anyway as govts try to claw back the billions they've just handed out - this will just accelerate the process.

No fear, Cha-cha to the rescue ...

Govt pledges Suez relief
The government stands ready to help businesses affected by a giant container ship blocking the Suez Canal in Egypt as the supply chain in many countries is beginning to feel the pinch from the blockage, deputy government spokeswoman Rachada Dhnadirek said.

Prime Minister Prayut Chan-o-cha has followed the situation closely to find ways to help Thai exporters and importers affected by the blockage. "If the private sector has any problem, the government is ready to help,'' she said.

The prime minister has acknowledged the private sector's concerns, but believes a resolution will be swift due to the coordinated salvage effort, she said.

According to the Energy Policy and Planning Office, the blockage would have little impact on energy supplies as Thailand imports very little natural gas by that route.

Ms Rachada was allaying concern about oil shortages, saying the country has imported oil from several suppliers and oil companies have sufficient stockpiles to last.

Deputy Prime Minister Jurin Laksanawisit previously said ships may have to be rerouted and seek an extension of deadlines for their shipments if efforts to clear the stricken vessel are prolonged.

https://www.bangkokpost.com/business/20 ... uez-relief

[PeteC]

There's Breaking News that the ship has been freed. More when the full story is released.

[PeteC]

This is all for now. No new photos or any other significant details.

https://www.bbc.com/news/world-middle-east-56559904

A huge container ship that has been wedged in the Suez Canal since Tuesday has reportedly been refloated.

Video posted social media on Monday appeared to show the stern of the Ever Given swung towards the canal bank, opening space in the channel. Maritime services company Inchcape also reported the vessel was freed.

Refloating the ship was a lengthy effort involving tugboats and dredgers.

The canal, which runs through Egypt, is one of the busiest trade routes.

The grounding of the Ever Given - part of the Evergreen fleet - meant other ships had to reroute around Africa.

After several days of failing to free the vessel, on Sunday canal officials began preparing to remove some of roughly 20,000 containers on board the ship in order to lighten the load.

Experts earlier told the BBC that such an operation would involve bringing in specialist equipment, including a crane that would need to stretch more than 60m (200ft) high, and that it would have taken weeks......

[PeteC]

More from Reuters: https://www.reuters.com/article/us-egyp ... BL0A3?il=0

More from Associated Press saying it is only "partially re-floated but still stuck"....

https://apnews.com/article/egypt-suez-c ... 8c2a495287

[handdrummer]

Rising costs of food, fuel, and households will happen anyway as govts try to claw back the billions they've just handed out - this will just accelerate the process.

No fear, Cha-cha to the rescue ...

Govt pledges Suez relief
The government stands ready to help businesses affected by a giant container ship blocking the Suez Canal in Egypt as the supply chain in many countries is beginning to feel the pinch from the blockage, deputy government spokeswoman Rachada Dhnadirek said.

Prime Minister Prayut Chan-o-cha has followed the situation closely to find ways to help Thai exporters and importers affected by the blockage. "If the private sector has any problem, the government is ready to help,'' she said.

The prime minister has acknowledged the private sector's concerns, but believes a resolution will be swift due to the coordinated salvage effort, she said.

According to the Energy Policy and Planning Office, the blockage would have little impact on energy supplies as Thailand imports very little natural gas by that route.

Ms Rachada was allaying concern about oil shortages, saying the country has imported oil from several suppliers and oil companies have sufficient stockpiles to last.

Deputy Prime Minister Jurin Laksanawisit previously said ships may have to be rerouted and seek an extension of deadlines for their shipments if efforts to clear the stricken vessel are prolonged.

https://www.bangkokpost.com/business/20 ... uez-relief

Like everything in Thailand, it's wait and see what happens. If they wait long enough, maybe the Virus will disappear and they won't have to buy vaccines if they wait long enough, maybe the ship will be freed and they won't have to support the importers, maybe if they wait long enough, China will build the high speed rail lines, maybe if they wait long enough, there will be a re-birth of wonder.

[HHTel]

The latest is that it's free and pointing north.
They could start clearing the backlog in hours

[Big Boy]

Do you have a source? I'm checking usual news sources, and they all say it's still stuck, but will float later today.

[HHTel]

I got it from the BBC news on Surf 102.5. There was a report from the Suez and all the tugs were sounding their horns in celebration. I'll have a look on Msn and BBC