Suez Canal Blockage Causes Global Trade Disruption
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Suez Canal Blockage Causes Global Trade Disruption
- The 2021 Suez Canal obstruction by the container ship Ever Given halted an estimated $9.6 billion worth of marine traffic daily.
- The 400-meter-long Ever Given ran aground on March 23, 2021, and was refloated six days later on March 29, 2021.
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On March 23, 2021, the container ship Ever Given, measuring 400 meters long and weighing 224,000 tons, ran aground in the Suez Canal. The vessel became wedged diagonally across a single-lane southern section of the canal, effectively blocking all maritime traffic. Strong winds, reaching up to 74 kilometers per hour, contributed to the incident, causing the ship to lose its ability to steer and hit the canal’s bank. Egyptian authorities also suggested that technical or human errors might have played a role.
The Suez Canal is a critical global trade chokepoint, facilitating approximately 12% of worldwide trade and about 30% of global container traffic, with over $1 trillion worth of goods transiting annually. The blockage had immediate and significant repercussions on global commodity markets and supply chains. Estimates indicated that the obstruction halted an average of $9.6 billion in marine traffic each day. Some analyses suggested that each day of immobilization could cost global trade between $6 billion and $10 billion. The incident led to a rapid buildup of ships, with over 300 vessels queued by March 27, 2021, waiting to pass through the canal.
Salvage operations, managed by the Dutch firm Royal Boskalis through its subsidiary Smit Salvage, involved dredging 30,000 cubic meters of sand and utilizing 14 tugboats. After six days, the Ever Given was successfully refloated on March 29, 2021, allowing traffic to resume. The blockage caused delays for numerous commodities, including crude oil and liquefied natural gas, and contributed to increased freight rates and supply chain disruptions that were felt for months.