(Bloomberg) — Tugs and diggers have so far failed to dislodge a massive container ship stuck in the Suez Canal, increasing the chances of prolonged delays in one of the world’s most important trade arteries.
Work to re-float the ship was suspended until Thursday morning in Egypt, shipping agent Inchcape said, citing the Suez Canal Authority. Dredgers are still trying to loosen the vessel before any attempt to pull it out, the ship’s manager said.
On Thursday, an elite salvage squad is due to arrive to figure out how to prise the 400-meter (1,300 feet) container carrier from the canal wall.
The Ever Given, which is longer than the Eiffel Tower, ran aground in the southern part of the canal in Egypt on Tuesday, halting traffic and causing gridlock for ships hauling everything from oil to consumer goods. It’s another setback for global supply chains already strained by the e-commerce boom linked to the pandemic.
About 12% of global trade goes through the canal, making it so strategic that world powers have fought over the waterway since it was built more than a century ago.
“The Suez Canal blockage comes at a particularly unhelpful time,” said Greg Knowler, European editor at JOC Group, which is part of IHS Markit Ltd. “Even a two-day delay would further add to the supply chain disruption slowing the delivery of cargo to businesses across the U.K. and Europe.”
The Suez Canal Authority hasn’t commented on the work or given any indication of when traffic could resume.
The 193-kilometer-long (120 miles) canal is among the most trafficked waterways in the world, used by tankers shipping crude from the Middle East to Europe and North America, as well as in the opposite direction. On Wednesday 185 vessels, mostly bulk carriers, container ships, and oil or chemical tankers, were waiting to cross the canal, according to shipping data compiled by Bloomberg.
Oil companies are starting to prepare for the worst. On Wednesday, there was an uptick in interest from oil companies looking to book tankers with options to avoid the canal, according to a broker, and several bid for space on the pipelines that allow to bypass the waterway completely. For now, that’s a just-in-case move. Container ships will most likely have to wait it out, as the main alternative is the unattractive option of sailing around the southern tip of Africa.
The disruption comes at a time when oil prices were already volatile. Crude surged above $70 a barrel earlier this month on Saudi production cuts, only to slump close to $60 this week due to setbacks in Europe’s coronavirus vaccine program. Brent crude rose more than 5% on Wednesday.
The Ever Given was grounded early Tuesday amid poor visibility caused by a dust storm and wind speeds that reached 40 knots, resulting in a “loss of the ability to steer the ship,” according to the canal authority. It’s still in the same position as when it ran aground, according to Inchcape.
It was traveling from China to Rotterdam. The crew are safe and accounted for, and there have been no reports of injuries or pollution, according to the ship’s manager, Bernhard Schulte Shipmanagement. The vessel is carrying cargo for logistics company Orient Overseas Container Line Ltd., according to Mark Wong, a spokesman for OOCL.
At 400 meters in length, Ever Given was built in Japan about three years ago. Shipping companies have been turning to mega-sized vessels to help improve economies of scale, while some key routes — including the Suez Canal — have been widened and deepened over the years to accommodate them.
(Updates with latest details on rescue efforts in first paragraph.)
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