The World’s Economy Now Faces A Big Setback
The name Evergreen is sweeping the world and becoming a household known company. Evergreen Marine Corporation, a Taiwanese shipping company created a big problem for the world economy. The reason? Their skyscraper long container ship named the Ever Given became lodged, blocking the Suez Canal, one of the most important shipping lanes in the world. The ship is one of the largest in the world and is being compared to the Empire State Building which has a height of 445 meters or 1460 ft. The Ever Given, a 200,000 ton ship was carrying 18,300 containers of the 20,000 limit during the time of the incident. The Suez Canal Authority (SCA) has a ship length limit of 400 meters (1312 ft) to pass through the canal, the Ever Given was made at a length of 399.94 meters (making it possible to travel through. The interesting thing is that the Canal is only 205 meters (672 ft) wide making it well possible for an incident like this to happen.
This image taken from a cargo ship just behind The "Ever Given" shows that there were no chances for other ships to just simply go around the 200,000 ton ship. It forced fellow ships to wait 6 days until they could finally pass.
(Photo Courtesy: theloadstar.com)
The accident took place on Tuesday, March 23rd at 7:40am Egypt time and 11:40pm MT. The original blame of the ship running aground or in other words becoming stuck was a gust of wind, and a sandstorm that was reported at 40 knots (46mph). Later on, the SCA said that wind is not the only reason and an investigation will be put in place to determine if it was human error, technical error, or both. As of Sunday, March 28, there were a reported 369 ships waiting on either side of the canal waiting to pass. This was a big reason that authorities had to work to get the ship unstuck as fast as possible, with millions and millions of dollars of goods just sitting in the ports of the canal. SCA chairman Osama Rabie later went on to say that the canal was losing $14-15 million in revenue everyday that the ship was stuck. The blockage could see a cost in global trade of over $6-10 billion per week. This due to the fact that around 12% of global trade passes through the canal everyday. With lots of traffic and lots of money passing through, a six day absence of the passage is going to be detrimental to the world economy. The world will also see a rise in oil and petrol in the coming months, as over one million barrels of oil and around 8% of the world's liquefied natural gas passes through the Suez Canal each day. Extreme resources like oil have such a great value which will force more and more money to be lost even months after.
With originally no knowledge of what was next after the ship became stuck, ships and their shipping companies had the tough decision of whether to wait in the ports of the Suez canal or take the long way around Africa and the Cape of Good Hope. It is a tough decision for the companies as the change of routes can cost them more money and time which is detrimental in the trade world. For example, a trip from Taiwan to Rotterdam, Netherlands using the Suez Canal 10,000 miles taking an average 25.5 days. With that same destination, using the Cape of Good Hope would take an estimated 34 days traveling 13,500 miles. The more days a ship is out at sea costs plenty of more money which is why it is such a tough decision for a shipping company to make. Companies were also fearing that the blockage could continue on longer and possibly force them to get their goods shipped by plane rather than boat. The problem is that shipping by air cost almost three times as much as shipping by boat. With 2020 already affecting companies values and profit made, companies want to spend as little as possible to get goods to where they need to be. According to Lloyd’s List, an estimated $9.6 billion worth of goods were being held up due to the blockage. The true value of loss will not be known for months as ships still need to be getting where they are supposed to be going.
A Satellite Image shows The "Ever Given" blocking the entirely of the Suez Canal. Tugboats worked to pull the back side of ship away from the west bank of the canal.
(Photo Courtesy: indiatoday.in)
The efforts to free the ship from the canal had to be carefully thought out and planned before taking action. It wasn’t going to be easy for workers to remove a 200,000 ton shipping container from land. The Ever Given was turned right making its back side stuck on the left side of the canal and the front side on the right. Tugboats worked everyday the ship was stuck, trying to push and pull the back end of the Ever Given from land to water. With all that going on, excavators worked continuously to dig out the bow, or the front side of the ship from the land. Workers used full moons and high tides to their advantage making it just a little bit easier to move the ship. On March 29th, the Monday after the ship had run aground, workers used the hide tide and were able to pull the back end of the ship out and fully in water. With that in effect and excavators still digging out the bow of the ship, the front end eventually was free enough to be pulled out. After a long six day salvage period, workers finally got the ship fully freed and floating on its own.
They got the ship freed at around 3:05pm local time or 7:05am MT. That Monday, the day the ship was re-floated, managing editor of shipping journal Lloyd’s List Richard Mead said that there were now around 450 ships waiting on either side of the Suez Canal waiting to pass through. It still is not clear on the total amount of money loss the blockage will cause on the world economy. What we do know is that it is going to be tough to get out of such a deep hole in revenue loss for not only the canal itself but the shipping companies that had to delay their ships. It is such a long process of finding the goods to then ship and get them in the hands of who needs them, and everyone involved in the long process will see money loss. The SCA is now working hard to make sure something like this does not happen again, as another blockage could be a detrimental punch to the world's economy.
Excavators worked hard to dig out the bow of the ship from land. It was said that the excavators worked 24/7 until the ship was freed from the bank of the canal. SCA chairman Osama Rabie praised everyone who worked in the efforts to free the ship.
(Photo Courtesy: thegaurdian.com)
Caden Eatherton '21