Suez Canal Clears Backlog, Global Shipping Faces Months of Disruption
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Suez Canal Clears Backlog, Global Shipping Faces Months of Disruption
- The Suez Canal Authority (SCA) announced that the backlog of 422 ships, caused by the grounding of a large container ship, was cleared by April 3, 2021.
- The container ship, Ever Given, ran aground on March 23, 2021, and was refloated six days later on March 29, 2021.
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The Suez Canal, a critical waterway connecting the Mediterranean Sea and the Red Sea, experienced a significant disruption in March 2021 when the container ship Ever Given ran aground. The 400-meter-long vessel became wedged across the canal on March 23, 2021, effectively blocking all traffic in both directions.
The incident quickly led to a massive backlog of vessels, with at least 369 ships queuing to pass through the canal by March 28, 2021. This blockage halted an estimated $9.6 billion worth of goods per day, significantly impacting global supply chains already strained by the COVID-19 pandemic. The Suez Canal is a vital artery for international trade, handling approximately 12% to 15% of worldwide trade and about 30% of global container traffic.
Salvage operations, involving Egyptian, Dutch, and Italian tugs, along with extensive dredging, successfully refloated the Ever Given on March 29, 2021. Following its refloating, the ship was moved to the Great Bitter Lake for inspection, and the canal resumed shipping traffic. The Suez Canal Authority worked to clear the accumulated backlog, with all 422 stranded ships having passed through the canal by April 3, 2021.
Despite the swift clearance of the immediate backlog, experts warned that the ripple effects on global shipping and port operations could persist for months. The disruption caused costly delays for businesses and led to a nearly twofold increase in rates for oil product tankers. In the aftermath, Egyptian authorities impounded the Ever Given and sought compensation for losses incurred during the blockage, which included transit fees, damage to the waterway, and salvage operation costs.