The Suez Canal incident could reduce shipping capacity and large-scale lack of container equipment

2 min read

Flexport predicts that a crash on the Suez Canal will lead to a large-scale reduction in capacity, both in terms of capacity and container equipment. A domino effect is also expected when ships and equipment return to Europe. ASIAN.

The Suez Canal incident is putting further pressure on the already strained global shipping system. The number of ships waiting to pass through the canal hit a high on Monday last week, at 367.

About 80-90 ships have passed back each day since Ever Given has been rescued by stranding, according to Leth Agency. Before the accident happened, there were 52.7 times a day (up to now). As of Friday, there are still 206 anchored ships waiting to pass through the Suez Canal. That amount is almost four times higher than normal.

2019-11-17t190504z-990002758-r-1755-6172

A sharp increase in the number of ships crossing the Suez Canal in recent days could cause congestion in destination ports. Artwork: Reuters

After the container ships pass through the canal to the north, they will travel to Europe or the US East Coast. “What’s going to happen is we will definitely see,” said Nathan Strang, global ocean freight forwarder at freight forwarding company Flexport, in an online seminar presented by Flexport on Wednesday. The concentration of ships in European ports ”. Too many ships arriving at the same time will cause congestion. He added that “there will be a delay for services in Europe and the East Coast”.

Strang also speculates that carriers may cancel trains on other routes, allowing them to shift more ships to Eurasian services in response to the problem. “Carriers can begin to cancel trains on the trans-Pacific and trans-Atlantic service to reinstate the Far East (to Europe) service with greater profitability,” he said.

Anders Schulze, Flexport’s head of global ocean freight, predicted that the accident on the Suez Canal would lead to “widespread capacity reductions, both in terms of capacity and equipment (containers) that will have a domino effect when ships and equipment return to Asia.”.

Disruptions at the Suez Canal and congestion at European ports will limit the number of empty containers to be transported back to Asia. This will reduce the number of empty containers available to pack Chinese exports to the US on the trans-Pacific routes.

“The equipment situation is already serious, and now it will last,” Schulze said.

Even bigger challenges for shippers, at least one carrier – Maersk – temporarily suspended bookings shortly after the Suez Canal crash. As of last Friday, Maersk’s short-term booking requests from Asia to both Northern Europe and North America remain suspended until further notice.

Source: ndh.vn – Translated by fintel.vn