Clearing the Suez Canal

The Ever Given’s ill-fated six day stint blocking the Suez Canal came to an end on Monday. While the Canal Authority is confident that it is only a matter of days to clear the several hundred ships on either side, the knock-on effect to global supply chains one year into a pandemic is not. The past fourteen months have closed and reopened countries, skewered demand, blanked sailings, put equipment in the wrong places and today is causing double-digit delays in transit times and four-fold increases in rates.

All that with the traditional summer peak season yet to come and stimulus checks in the hands of Americans itching to spend them on something other than being trapped at home for the balance of the calendar year.

We have fielded numerous calls from customers looking at what transpired in Egypt and remarking they’re glad that this won’t impact them. Unfortunately, we’ve found ourselves in the unenviable position of explaining to many that yes, this will, and then lay out the reasons why.

30% of US east coast cargo passes through the Suez Canal

These weren’t just vessels that were destined for Europe and turning back to Asia. The six day blockage and expected four to five days to clear the congestion will delay by nearly two weeks ships that are sailing for ports such as New York, Norfolk, Charleston and Savannah. They will arrive to find an already scheduled ship in their intended berth, causing them to wait for availability and delaying their unlading.

Some ships chose not to wait and started their journey around Africa.

The canal saves 3,800 miles, 10 – 12 sailing days and hundreds of thousands of dollars of dollars in fuel. Several container operators chose to wait it out, others not. As a result, there are ships and service strings that may need to incur blanked sailings in the coming weeks to reposition vessels and reset their fixed-day schedules.

European exports are punished twice.

Exporters are already being asked to hold containers until shortly before vessel departure because terminals are overcrowded to the point of being paralyzed. For every day they or we have to hold those containers out, charges for equipment demurrage and detention accrue. Additionally, the delayed arrival of Asian imports also delays those containers being emptied and made available to load exports or return the empties to Asia to be reloaded. 

What is Argents doing?

At Argents, we know that the key factor for our customers to make sales is to have inventory on hand. We are working with our consolidation partners in Europe and Asia to identify priority services that are demonstrating the highest on-time percentages and instructing our customers to share with us the cargo that is most critical and needs to be either hot-loaded or we should be planning air cargo space which is becoming increasingly scarce in the wake of the Ever Given situation. 

Talk to your Argents representative if you have any questions about updates to vessel schedules and equipment availability in the wake of the past week’s events in the Suez.

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