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Suez Canal: crisis 2021 drags on as shipping rates surge . CityAM

Suez Canal: crisis 2021  drags on as shipping rates surge . CityAM

Suez Canal: crisis Suez Canal: crisis – shipping drags CityAM on as surge rates

Fri, 26 Mar 2021 10:00:00 +0000

Seven tankers were diverted away from the Suez Canal on Friday after traffic was suspended through the waterway where a large container ship has been stuck 

Seven tankers were diverted away from the Suez Canal on Friday after traffic was suspended through the waterway where a large container ship has been stuck since Tuesday.

Read more: Suez Canal: Rescue mission to recover ‘beached whale’ ship could take weeks

Three of the tankers are being diverted towards the longer route around the Cape of Good Hope, while most diverted ships originally signalled for Suez Canal are now headed elsewhere.

The 400-meters long Ever Given has been stuck in the canal since Tuesday and efforts are under way to free the vessel although the process could take weeks.

Analysts at Moody’s warned that even if the ship was freed in the next 48 hours, more tanker congestion and supply chain delays were now “inevitable”.

Daniel Harlid, a vice president at the ratings agency, said: “While the impact of the Suez canal blockage on individual sectors is hard to quantify, we expect Europe’s manufacturing, auto and auto suppliers to be most affected because they operate “just-in-time” supply chains.

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“This means they do not stockpile parts and only have enough on hand for a short period, and source components from Asian manufacturers.

Even if the situation is resolved within the next 48 hours, port congestion and further delays to an already constrained supply chain is inevitable.

Reeling from the blockage, shipping rates for oil product tankers have nearly doubled this week.

The suspension of traffic through the narrow channel linking Europe and Asia has deepened problems for shipping lines that were already facing delays in supplying goods.

Six liquefied natural gas (LNG) vessels are awaiting entry at either side of the canal while another has been stuck in the Canal since Tuesday, according to Kpler analyst Rebecca Chia.

“A total of 16 LNG vessels’ planned transit via the Suez Canal will be affected if the congestion persists until the end of this week,” Chia said.

Read more: Rapid build-up of tankers and laden vessels at blocked Suez Canal as alternatives are limited

A further 10 crude oil tankers are also awaiting entry to the strait, Kpler added, carrying 9.8m barrels of oil.

“There will be considerable delays in the loading schedule at Ras Laffan for the start of April due to the congestion.”

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Suez Canal: crisis Suez Canal: crisis

Fri, 26 Mar 2021 10:00:00 +0000

BRITISH shoppers could see the prices of cars, clothes, shoes and toys hiked amid warnings the giant ship blocking the Suez Canal may take weeks to 

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No10 has said the incident may cause exports to the UK to be delayed and analysts have warned shoppers could be expected to meet the increased cost imposed on companies.

On Thursday officials in the busy shipping route stopped all vessels entering in a major setback for global trade.

The 400 metre-long Ever Given, one of the world’s largest container ships, has been lodged diagonally in the channel like a “beached whale” for two days and holding up copious amounts of goods including oil, refined fuels and household items.

Consumers in the UK are set to be directly affected by the blockage as trade data shows exports from Asia destined for Britain are likely to be hit.

Items of furniture, clothing, footwear and homeware could be among the items carrying higher price tags when they eventually reach shelves in British shops.

Asian nations account for seven out of the top 10 exporters of electrical goods to Britain.

Britons planning on splashing out on a new motor could be affected, according to Douglas McWilliams, deputy chairman of the Centre for Economics and Business Research.

He told the MailOnline that a long-term blockage of the Suez Canal is likely to cause a shortage on the market of computer chips.

This could cause price jumps in products which use a lot of chips including cars.

Drivers could see an extra £70 added to their bill when purchasing a new car.

READ MORE: Suez Canal blocked LIVE: Impact of Ever Given jam to last MONTHS

Seven out of the top 10 exporters of electrical goods to the UK are Asian countries making them a likely casualty, while almost half of the UK’s furniture imports come from the same region.

Simon Macadam, senior global economist at Capital Economics, said if the “worse-case scenario” would be if the ship held up traffic for weeks, a time frame predicted by some analysts.

This, he said, would drive up the cost of shipping rates which are already floating at a higher than normal level due to the Covid pandemic.

He told the MailOnline firms already suffering due to the coronavirus crisis may be hit with bigger bills and could choose to pass the extra cost onto consumers later in the year.

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After a devastating 12 months, shops across the UK will be keen to recoup their massive losses when shopping begins to return to normal.

On Thursday dredgers worked to remove thousands of tonnes of sand from around the ship’s bow.

The Suez Canal Authority (SCA) said earlier that nine tugs were working to move the vessel, which is almost as long as the Empire State Building is high.

The ship got stuck in the single-lane southern stretch of the canal on Tuesday morning amid high winds and a dust storm.

Peter Berdowski, CEO of Dutch company Boskalis, one of two rescue teams trying to free the ship, was among the analysts to warn of potential lengthy delays to traffic.

He told the Dutch television programme Nieuwsuur: “We can’t exclude it might take weeks, depending on the situation.”

So far, more than 200 large container ships, tankers carrying oil and gas, and bulk vessels hauling grain have backed up at either end of the canal, according to tracking data, creating one of the worst shipping jams seen for years.

The backlog is set to increase dramatically on Friday as additional ships join the jam.

The Berdowski said: “It is like an enormous beached whale.

It’s an enormous weight on the sand.

“We might have to work with a combination of reducing the weight by removing containers, oil and water from the ship, tug boats and dredging of sand.”

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– March 26, 2021
Suez Canal: crisis 2021 drags on as shipping rates surge . CityAM

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