Last Update 17:5
Thursday, 23 September 2021

Suez Canal's blockage repercussions won’t be plain sailing for global economy: UNCTAD’s maritime expert

Jan Hoffman added that the cost of moving goods to Europe will increase further on top of the freight rates that have already gone up in recent months because of the pandemic

Doaa A.Moneim , Tuesday 30 Mar 2021
Ever Given
The Ever Given, a Panama-flagged cargo ship is accompanied by Suez Canal tugboats as it moves in the Suez Canal, Egypt, Monday, March 29, 2021. AP
Share/Bookmark
Share/Bookmark

The damage the Suez Canal blockage brought to global trade will take months to fix, and the incident’s repercussions will not be plain sailing for the sector worldwide, according to a maritime expert, Jan Hoffman, at the UN’s Trade and Development Agency.

Hoffman made his comments in an interview with UN News, which aired online on Monday.

The interview concentrated on the impact of the incident on global trade as well as the success of re-floating the ‘Ever Given’ vessel.

He said that the floating of the Ever Given is a relief for all who are looking to global trade and development in the wake of the huge deadlock the Suez Canal has witnessed for a week.

A small number out of more than 300 ships that were queued to transit in the canal have started to move, but it will take quite some time for all these ships to venture through the canal again, according to Hoffman.

He added that the due to the ships who decided to take the Cape of Good Hope route, especially the ones going from Asia to Europe, the arrival of goods to Europe will decline by about 30 percent in April, and it is expected to increase in the coming months.

“20 percent of what we eat, drink, and dress in Western Europe comes from the East of Suez. Electronics represent 40 to 50 percent for instance,” said Hoffman on how Eastern Europe will be affected by the Suez Canal blockage.

He added that the cost of moving these goods to Europe will increase further on top of the freight rates that have already gone up in recent months because of the pandemic.

The lesson the world learnt from the incident, Hoffman noted, is the importance of maritime shipping, as 80 percent of all goods are transported by ships.

He also added that sea accidents have significantly declined over the last decade, so ships have become more safe and much more secure.

Moreover, navigation safety has significantly improved, but human capital and officers have to be trained for such situations and acquire the capabilities to deal with and respond to them quickly, according to Hoffman.

Concerning the impacts of the incident on developing countries, Hoffman said that such countries are now suffering twice as much as developed ones — on average — in terms of input transportation.

He attributed this to the imbalances these countries’ economies suffer from and the lack of infrastructure and technology in the maritime sector that can help them to cope with such emergencies and improve their maritime transportation.

In the medium to long term, Hoffman said that decarbonising ships, instead of using oil and coal as fuel for them, will cause the biggest transformation the sector it has ever seen, and such transformation is expected to attract about $1.3 trillion in investments to the sector.

Short link:

 

Latest

© 2010 Ahram Online.