How painful will the blockage of the Suez Canal cause the world economy?

  A 400-meter-long heavy-duty container freighter flying the Panamanian flag has been blocked in the Suez Canal channel on the 23rd local time, and there are now more than 300 ships waiting to pass.

As one of the most important shipping channels in the world, the blockage of the Suez Canal has made the global supply chain "stuck in the throat".

  How painful will the blockage of the Suez Canal cause the world economy?

This depends on the progress of the canal dredging work, and more on the vulnerability of the global supply chain under the impact of the new crown epidemic.

  Data show that in global maritime logistics, about 15% of cargo ships pass through the Suez Canal.

Lars Jensen, CEO of the Danish "Maritime Intelligence" consulting company, said that about 30 heavy cargo ships pass through the Suez Canal every day, and one day of blockage means that 55,000 containers are delayed in delivery.

The German insurance giant Allianz Group estimates that the blockage of the Suez Canal could cost global trade between US$6 billion and US$10 billion a week.

  The Suez Canal management stated that cargo ships can choose to wait or detour the Cape of Good Hope at the southern tip of Africa.

However, no ships currently choose to detour.

Waiting, not sure when it will pass, will have to pay extra costs every day; but detouring means paying several weeks of extra voyage and associated costs.

  Due to the high dependence on the Suez Canal shipping channel, the European market has clearly felt the inconvenience caused by the blocked logistics.

Many European home furnishings and home appliance retailers have stated that there are goods blocked in the canal, which will cause delays in delivery.

Once the situation is not alleviated for a long time, it may cause prices to rise.

  Not only is the retail industry "pain", but the manufacturing industry is also the same.

International rating agency Moody's analyzes that because European manufacturing, especially auto parts suppliers, has been pursuing "just-in-time inventory management" to maximize capital efficiency and will not stock up large amounts of raw materials.

In this case, once logistics is blocked, production may be interrupted.

  Not only that, if the congestion continues and a large number of cargo ships cannot turn around, it will inevitably lead to increased shipping rates, increase the cost of global trade, and cause a chain reaction.

Since the second half of last year, the international shipping market has been affected by factors such as container shortages and trade recovery. The shipping capacity has already been very tight, and the shipping price has been at a high level.

Blocking the Suez Canal is tantamount to "sprinkling salt on the wound" of the shipping market.

  At the same time, transportation delays will also generate a large number of insurance claims, which will put pressure on financial institutions engaged in marine insurance, or will trigger turbulence in areas such as reinsurance.

  In addition, some market participants worry that the prices of international crude oil and other commodities will skyrocket due to the blockage of the Suez Canal.

  This incident also gave global trade a "reminder" not to rely too much on shipping, do not "put eggs in the same basket", and promote the construction of land logistics systems like China-Europe Express.

  Xinhua News Agency reporter Su Liang

  (According to Xinhua News Agency, Beijing, March 28)

  related news

  14 tugboats rescued

  The effect is unspeakably optimistic

  According to Xinhua News Agency, Suez, Egypt, March 27 (Reporter Li Binian) Usama Rabie, chairman of the Suez Canal Authority of Egypt, said on the 27th that Egypt has formulated multiple rescue plans. At present, 14 tugboats are stranding freighters. Rescue in multiple directions.

Due to the huge size and load capacity of the freighter, coupled with the shallow water level at the grounding, it is still impossible to tell when the rescue will end.

He said that after the rescue is over, the specific reasons that led to the grounding of the freighter will be investigated.

  Rabie said that there are currently 321 ships waiting on the northern and southern sides of the Suez Canal, and the Egyptian side has provided them with the necessary logistics services.