How Suez Canal Blockage Is Delaying Around $400 Million An Hour In Goods

The stranded mega-container vessel, Ever Given in the Suez Canal, is holding up an estimated $400 million an hour in trade, based on the approximate value of goods that are moved through the Suez every day, according to shipping data and news company Lloyd’s List.

Lloyd’s List calculates blockage is costing $400 million an hour.

Lloyd’s values the canal’s westbound traffic at roughly $5.1 billion a day, and eastbound traffic at around $4.5 billion a day.

The blockage is further stressing an already strained supply chain.

Lloyd’s values the canal’s westbound traffic at roughly $5.1 billion a day, and eastbound traffic at around $4.5 billion a day. The blockage is further stressing an already strained supply chain, said Jon Gold, vice president of supply chain and customs policy for the National Retail Federation.

“Every day that the vessel remains wedged across the canal adds delays to normal cargo flows,” he said, adding that the trade group’s members are actively working with carriers to monitor the situation and determine the best mitigation strategies.

“Many companies continue to struggle with supply chain congestion and delays stemming from the pandemic. There is no doubt the delays will ripple through the supply chain and cause additional challenges.”

The Suez Canal, which separates Africa from Asia, is one of the busiest trade routes in the world, with approximately 12% of total global trade moving through it. Energy exports like liquified natural gas, Crude oil, and refined oil make up 5% to 10% of global shipments.

The rest of the traffic is largely consumer products ranging from fire pits to clothing, furniture, manufacturing, auto parts, and exercise equipment.

“The key to this problem hinges on how much longer it will take to move the Ever Given,” explained Alan Baer, President of logistics provider, OL USA LLC. “USA importers face arrival delays of three days right now and this will continue to grow as long as the disruption continues.”

Horn of Africa

The Suez has provided some relief for global importers as they increasingly relied on it last year to avoid massive congestion at West Coast ports in the U.S. that added days, if not weeks, to some deliveries coming from Asia.

Baer, who has containers on vessels stuck in both lanes of the Suez Canal, said if it stays closed, vessels will be diverted and go around the horn of Africa, which adds an additional seven to nine days to a trip.

According to BIMCO, the largest of the international shipping associations representing shipowners, the bottleneck will only continue to grow and impact supplies.

“Everyone is making contingency plans as we speak,” said Peter Sand, a chief shipping analyst at BIMCO. Analysts at www.sokodirectory.com believe that this incident has raised the concerns that few are always willing to talk about, the need for alternatives when such happens. Depending on the Suez Canal alone is proving to be a risky affair in a world that is changing every day. Is it a possibility to get an alternative to the canal?