Suez Canal disruption causing financial loss
Egypt’s Suez Canal, the artificial water-way is one of the world’s busiest shipping channels linking Asia and Europe. The canal connects the Mediterranean Sea to the Red Sea through the Isthmus of Suez and holds trade importance.
India is the top importer of crude and products that travel through the Suez Canal. It gets around 500,000 barrels per day, followed by China. The containers on the ship are mostly oil, petroleum, and bulk vessels.
On Tuesday, March 23, a cargo ship, Ever Given got stuck on the Suez Canal due to high winds and a dust storm, leading to a traffic jam for at least 150 other ships on the way. Rescue operation for the ship is underway and is expected to take weeks before the canal opens up for transport again.
Ever Given, a Panama-flagged cargo ship, thrice the size of a football field is loaded with 20,100 steel boxes, waiting to be delivered to its destination. It weighs 224,000-ton and is 400 metres long.
The Suez Canal holds economic and trade value. Since 1869, the canal has been used for the transportation of goods, from petroleum to coffee granules. Without the canal, ships would need to travel an extra mile, burn extra fuel, and meet extra expenses.
The more the ship remains stuck in the canal, the more financial damage it is causing to the world economy. According to the shipping journal Lloyd’s List, each day the Suez Canal is closed, it would disrupt over $9 billion worth of goods that should be passing through the waterway.
The blockage has caused shipping rates for oil product tankers to nearly double up. The suspension of the traffic has also caused a delay in the delivery and supply of retail goods to the consumers.
(PBNS)
