For the third consecutive day, the container ship Ever Given remains stuck in the Suez Canal, paralysing world maritime trade passing through the canal.
The incident could represent a worst-case scenario for global trade, according to a report issued by Conversation Africa.
The Ever Given container ship is 400 metres long, 59 metres at its widest point and 16 metres deep below the waterline, with a carrying capacity exceeding 18,000 containers, making it one of the largest container ships in the world, according to the report.
“Depending on the severity of the grounding, the salvage and re-floating of this type of ship is a complex operation, requiring specialist equipment and potentially a lot of time,” said the report.
Some 12 percent of global trade navigates through the Suez Canal, with a total of 18,829 ships carrying 1.17 billion tonnes of cargo passing through the canal in 2020, according to the Suez Canal Authority (SCA).
According to the Organisation for Economic Co-operation and Development (OECD), the main transport mode for global trade is ocean shipping with around 90 percent of traded goods being shipped through maritime transport.
As a result of the disruption of navigation through the Suez Canal, it was announced on Wednesday that the delivery of Taiwanese ferrous scrap would be postponed till May.
Accordingly, ferrous scrap container rates are expected to increase to $900 per container for the US-to-Taiwan route on 1 April, up from $800 in March, according to Argus Media, an international independent pricing agency that covers energy and commodity markets.
Argus said that the rate is typically around $300 to $400, but a shortage of containers has sent costs higher since mid of 2020.
Moreover, some Japanese scrap exporters have increased offers for H1/H2 50:50 scrap to Taiwan by $10/t to $410-420/t cfr today in response to rising bulk freight costs, according to Argus.
In Europe, shippers have issued notifications to an India-based trader that synthetic rubber cargo shipments will be delayed for about seven days; while two vessels from Asia carrying 10,000 tonnes of vinyl acetate monomer may not arrive on schedule in Europe, according to ICIS, a global independent commodity intelligence services provider.
Any further impacts on commodity shipments will widely depend on how soon the Suez Canal can get back into operation, ICIS said, stressing that delays in shipments caused by the blockage could aggravate the supply crisis in some markets.
Any disruption in the Suez Canal represents a significant choke point to trade at a time when shipping routes are already substantially disrupted because of the COVID-19 pandemic. The Suez Canal is a crucial route for crude oil, chemicals and refined products travelling from the Middle East and Asia Pacific to Europe and North America.