Learnings from the Suez Canal blockage
The freeing of the giant container ship that was stuck in the Suez Canal for six days, MV Ever Given, should come as a huge relief for global trade. According to news reports, the ship is now headed for a port in Egypt where it will be thoroughly inspected for any damage to the vessel. As pointed out by most experts, the resumption of sea traffic on the canal is crucial to maintain supply chains and trade. Consider this: About 50 ships pass through the canal every day, carrying cargo valued at $9.5 billion daily. MV Ever Given is said to be carrying goods worth $1 billion. About 70% of international trade is conducted through the sea, which only underlines how important waterways are. Although sea traffic has resumed across the Suez, it is expected to take days before the backlog is cleared as more than 150 ships were reported to have been waiting on either side of the canal for Ever Given to be freed.
The Suez Canal blockade has already sparked a debate among experts and perhaps governments to explore alternative sea routes. The first and obvious call has been to resume trade through the old route of going around the African continent via the Cape of Good Hope. But that is clearly more time-consuming and probably not economically viable as it will push up the already high freight rates. Many shipping companies have also pointed out that this route is a security risk as many pirates operate in the region. But while the length of this route cannot be reduced through any human intervention, the menace of piracy is not an insurmountable problem. Since almost all countries have high stakes in maritime trade, it is in the interest of all nations to provide security to the merchant ships. Lastly, there could be a relook at the protocol on ships that pass through the canal. Ever Given is considered among the largest containers in the world and dislodging it from where it was stuck took almost a week. A smaller ship could have been freed in fewer days, disrupting supply chains for a shorter time and causing minimal loss.