A surge of imports is set to hit European ports following the dislodging of the 200,000-tonne Ever Given ship from the Suez Canal.
Around 100 container ships with an aggregated capacity of 1m TEU are waiting to cross the Canal, Lloyd’s Loading List reports. While some of that cargo is outbound or empties, on average 52% of canal capacity each week is northbound to Europe.
'Chaos and congestion'
“From our perspective, it is going to be more chaos and more congestion,” said Eleanor Hadland, senior ports analyst at maritime research consultancy Drewry.
A catch-up operation will create more pressure to clear the backlog of empty containers that continue to clog ports.
The situation is even worse on the US West Coast where a lack of capacity means that ships are having to anchor for up to two weeks before unloading. In Europe, carriers have the option of diverting to smaller, less busy terminals, Hadland said.
The International Federation of Freight Forwarders Associations said disruption of the supply chain was expected to “worsen dramatically” over the coming weeks. This would result in “high delays in shipments, increased costs and product shortages”, it warned last week.
Air affected too
Air freight is also operating at full capacity, analysts have told Loadstar, estimating that it will take two weeks for the impact of the crisis to “unravel”.
“It’s like a champagne cork being released,” said one forwarder.
Capacity is already an issue with greater use of air for test kits and vaccines, said Ekaterina Andreeva, commercial director for Russian air cargo carrier Volga-Dnepr. She said its partners were booked for all of April and prices are expected to rise.
“We can predict a busy market for a couple of months, but maybe it will lessen over the summer. But rates could be elevated until the end of the year,” she said.
While the Suez incident has had a major disruptive effect on world trade, TI comments that it was resolved fairly quickly and despite chatter about the vulnerability of just-in-time logistics, “the incident illustrates that shipping is quite robust due to its flexibility”.
As the world looks to the cost of the Ever Given blockage, the CEO of Lloyd’s of London told the Standard that losses to the market from the blockage of the Suez Canal would be in the “hundreds of millions” but said that the claims were easier to deal with than Covid.
“It is the very type of loss we are used to,” John Neal said. “It will be quite a big marine claim but not particularly out of the ordinary.”
By comparison, the pandemic has cost Lloyd’s £6.2bn in payouts.