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Ship stranded in Suez Canal could have ‘massive ramifications’ for global supply chain: historian

The Suez Canal has only been closed for a few days so far, but a maritime historian warned that the blockage could have massive economic impacts around the world

“You could see the potential for an economic recession, much the same way we saw in early 2020,” explained Sal Mercogliano, who is also an associate professor of history at Campbell University in North Carolina.

The MV Ever Given, a Panama-flagged ship that carries cargo between Asia and Europe, ran aground Tuesday in the narrow, man-made canal dividing continental Africa from the Sinai Peninsula. While crews scramble to free the vessel, the dozens of ships that usually traverse the canal daily are stuck in limbo.

“I’m not going to send vessels if I’m a shipper.… I’m going to start detouring them 3,000 to 4,000 miles around Africa and adding 12 to 14 days on my voyage,” Mercogliano told The Current’s Matt Galloway.

Mercogliano told Galloway those extra days could lead to further delays at ports in Europe causing shortages in goods. Here’s part of their conversation.

Just briefly, take me to the Suez Canal. You have been through the canal. What is it like?

It is a very long day for the crew on board. Start off very early in the morning. You set sail into the canal with at least two embarked Egyptian pilots on board — Suez Canal pilots. And it’s fairly routine. It’s narrow at times and very narrow where the Ever Given is.

So it’s a really long day passage, but absolutely essential for world trade. 12 per cent of the world’s trade goes through that artery. And what you’re seeing right now is a blockage of one of the key maritime choke points in the world.

The statistic is 90 per cent of everything that we use travels by ship. Given the fact that that passageway is blocked, how serious of an issue is this?

I can’t tell you … how serious this is. The Ever Given is, you know, approximately 400 metres long — you know, 1,300 feet. She’s an ultra-large container ship, one of these new brand of container ships designed to carry over 20,000 containers. And she has gone across the channel.

She’s literally longer than the Suez Canal is wide where she’s at. So her bow is planted in Asia and her stern is resting on Africa and she’s hanging there across the channel.

What you’re seeing right now is the pile up of vessels. Roughly about 50 vessels go through the canal every day. So we’re seeing about 175 vessels after three days sitting there. Lloyd’s List in London estimates about nine billion dollars’ worth of goods go through the canal on a daily basis.

We see, at least right now, 10 tankers sitting off the anchorages with about 13 million barrels of oil trying to get to Europe. This is going to have massive ramifications.

There was an attempt to get her off last night at high tide in the canal; it failed. And now they’re removing the vessels that were behind her in the canal, which tells me that the salvage is going to be a long-term prospect. Read Full Article >

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