Global Trade After the Suez Canal Situation
The ship stuck sideways across one of the world’s busiest and most important trade channels was finally freed. Beyond capturing international attention, costing the global economy billions of dollars in lost trade, and launching multitudes of memes, the situation has reminded the world on the fragility of supply chains.
Published: April 2, 2021
The blockage of the Suez Canal by mega container ship Ever Given has sent ripples through global commodity markets.
ACCESS THE TOPIC PAGETrade Disruption
Is the recent six-day Suez Canal blockage causing a spike in container box freight?
And are the canal's misfortunes the only culprit for impending port delays, or the tip of the iceberg?
It may be all too easy to blame the Ever Given incident for the latest logistical issues, rate hikes and arbitrage impacts on agricultural, metals and petrochemical commodity markets.
S&P Global Platts Americas shipping managing editor Barbara Troner examines the container market with Platts experts Greg Holt in Houston and George Griffiths in London.
Containership Ever Given Arrested by Suez Canal Authority: Sources
The Ever Given, the containership that was stuck in the Suez Canal in March, has been arrested by Egyptian authorities over non-payment of a claim of around $916 million.
Read the Full ArticleLife After Suez: April 2021 Events Calendar
Global trade in April is likely to be focused on the recovery from the Suez Canal blockage, as detailed in Panjiva's research of March 29.
Read the Full ArticleContainer Markets Face High Rates and Canceled Sailings After Suez Incident
Shipping schedules to US East Coast in disarray after delays in transiting canal.
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Pricing Pressures
Spot container freight rates for trans-Atlantic head-haul shipments climbed to the highest level on record as shippers scrambled to book limited available space on major shipping lines.
Platts Container Rate 9 -- UK Continent to East Coast North America – increased by 25% from last week to $3,000/FEU on April 12, the highest level since the assessment was launched in July 2017.
Suez Canal Blockage May Heighten Price Pressures in Steel, Metals: Sources
The Suez Canal blockage by the grounded Ever Given container ship is not expected to immediately impact steel and metals supplies worldwide, market sources said March 25.
However, it is fueling expectations of eventual rises in bunker and freight rates and inventory-squeezing that could exacerbate current upwards price pressure, particularly in steel and copper, they said
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Oil Market Implications
In this episode of the Oil Markets Podcast, S&P Global Platts reporters Charlotte Bucchioni and Britt Russell-Webster discuss with Joel Hanley the impact of the blockage on freight and fuel markets, as well as the outlook as the queue slowly clears.
Oil Futures Turn Volatile as Market Unpacks Suez Canal Blockage; Guyana Producers Stay on Target
The oil futures market has been volatile on news that a large container ship was blocking the Suez Canal, a key artery for petroleum shipments, but do spot markets give a better indication of the impacts on global trade flows?
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New Transit Routes
Taiwan's Evergreen Marine Corp, operator of the containership arrested by the Suez Canal authorities and whose thousands of containers are stranded on it, is exploring the possibility of transferring the cargo to another ship, while compensation claims are presently disputed and sub judice.
The Ever Given, an ultra large containership that was stuck in the Suez Canal for around six days last month, was formally arrested by the authorities there on April 13 over non-payment of claims of around $916 million.
More Container Ships Opt for Cape of Good Hope Transit
The HMM Rotterdam, an ultra large container ship has turned south on its voyage Eastbound from Europe and appears to be heading for transit via the Cape of Good Hope, rather than join the ever lengthening queue of ships waiting for the Suez Canal to reopen.
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Insurance Claims
The insurance industry faces a claim in the low hundreds of millions of dollars after a container ship blocked the Suez Canal, a major trade route.
But the freeing of the Ever Given, a 20,000 twenty-foot equivalent unit-capacity container ship, on March 29, six days after it ran aground, means the industry has avoided a much larger claim.
Key Takeaways
- Marcus Baker, global head of marine and cargo at insurance broker Marsh LLC, said in an interview that the claim would be "significant" and "still a couple of hundred million [dollars], but it's not a billion."
- The authority will likely bill the ship's owner for a combination of damage to the canal itself, its assistance in the salvage — such as the hire of tugs and dredgers — and loss of revenue.
- Uncertainty remains about the size of the Suez Canal Authority's claim for loss of revenue. Some estimates have put the authority's daily revenue at $15 million, based on its annual revenue.