Grounded Suez Canal mega-ship is blocking shipments worth $9.5BILLION per day with 'enormous' consequences for global economy as rescue chief warns it could be stuck for WEEKS
- Cargo ship Ever Given, one of the world's largest, remains wedged in the Suez Canal as rescue efforts resume
- Dutch expert brought in to help has warned operation could take 'weeks' and might involve taking cargo off
- Goods worth an estimated $29billion are currently stuck in the logjam, with another $9.5bn added each day
- Knock-on effect already being felt, as oil prices jumped 6 per cent on Wednesday as news of blockage spreadThe giant cargo ship wedged across the Suez Canal is blocking shipments worth an estimated $9.5billion per day including food and oil which will have an 'enormous' impact on the world economy, experts have warned.
At least 150 ships are now stuck in the logjam caused by 200,000-ton cargo ship Ever Given which ran aground in the narrow channel on Tuesday, with goods worth $29billion already held up.
The effect has been felt on world markets already as the price of crude oil shot up 6 per cent on Wednesday, reversing months of often-record falls caused by the coronavirus pandemic.But the true cost of the disaster will be far higher as delays to vital goods cause losses at firms around the globe. Kate Harding, chief executive of trade data firm Coriolis Technologies, warned today that the risks to global trade are 'absolutely enormous'.
If the canal cannot be quickly unblocked then shipping firms will have no choice but to route their vessels around the Cape of Good Hope at the tip of Africa - a route that adds 14 days and 5,000 nautical miles to the journey.
That could mean higher prices for goods shipped to Europe from Asia - including cars, construction materials, and coronavirus PPE - as shipping companies increase their charges to cover the cost of taking longer routes.
Meanwhile the CEO of a team of Dutch experts brought in to help the rescue operation warned that the canal could be closed for 'weeks', with workers forced to unload cargo containers stacked some 100ft high on the ship's deck if attempts to dig it out fail.
Peter Berdowski, CEO of Dutch company Boskalis, compared the ship to 'an enormous beached whale' as he warned workers might have to start offloading cargo in order to reduce its weight and get it floating again.
'We can't exclude it might take weeks, depending on the situation,' he told Dutch media. '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.'
He spoke as canal workers, who had paused work overnight during low tide, this morning restarted efforts to free the ship - which is about as long as the Empire State Building is tall - from where it has lodged diagonally across the waterway.
Excavators are trying to dig out the vessel's dolphin-nose bow which has lodged in the eastern wall of the canal, while dredgers and tugboats try to shift its stern which is jammed against the western side.
Efforts to free one of the world's largest container ships which became lodged in the Suez Canal on Tuesday have resumed this morning, as experts warn it could take weeks to refloat the stranded vessel
Canal workers are attempting to dig the boat's dolphin-nose bow out of the eastern bank of the canal, while tugboats and dredgers attempt to free its stern which is wedged against the western wall
The canal provides the shortest possible route for ships travelling between Asia and Europe, with the only alternative being to sail around the Cape of Good Hope - adding 14 days and 5,000 nautical miles to the journey
If workers cannot dig the ship free, then they face the daunting task of somehow getting cranes into the middle of the desert that are tall enough to start removing cargo containers from the deck of the vessel
Every day the canal is blocked means 10 per cent of oceangoing trade cannot move as it should, with 50 ships being added to the massive traffic jam building up around the canal (pictured)
Shipping data shows the extent of the traffic jam building up which is straddling two continents and currently involves some 150 ships (position of the Ever Given is marked with a white circle)
What the Suez Canal blockage means for the UK? Imports of electricals and toys will likely be affected - but health and beauty supplies should go unscathed
The enormous ship currently stuck in the Suez Canal thousands of miles away could soon start to affect British shoppers.
As a small island nation with a services-focused economy, the UK is incredibly reliant on imports from around the world.
Many of these goods pass through the Suez Canal from Asia, while others from Europe and the US will go unscathed by the crisis.
The logjam in the waterway will probably not stall supplies significantly, as ships will be re-routed round Africa's southern cape, but it could mean you have to wait a few more weeks for your TV.
Here, MailOnline drills down into the numbers to assess how vulnerable Britain is to supplies coming from the East.
IMPORTS LIKELY AFFECTED
Electricals
Seven out the top 10 exporters of electrical goods to the UK are Asian countries
Seven out the top 10 exporters of electrical goods to the UK are Asian countries.
While 47 per cent of electrical imports come from the EU, the bulk of the remaining 53 per cent are shipped from Asia.
Chinese products account for 28 per cent, while Hong Kong produces 5.4 per cent and Vietnam 5.1 per cent.
Taiwan, Singapore, Japan and Malaysia are also in the top 10.
Clothing and footwear
All but two of the top 10 exporters Britain most relies on for clothing are from Asia.
Again, the EU exports the lion's share (39 per cent) while we import a fifth from China, 9 per cent from Bangladesh and 5 per cent from India.
Vietnam, Pakistan and Sri Lanker also export clothing to the UK.
Furniture
All but two of the top 10 exporters Britain most relies on for clothing are from Asia
Roughly half of the UK's furniture imports come from Asian countries and shipped through the Suez Canal.
Nearly a third (31 per cent) come from China while Vietnam, India and Hong Kong are also in the top 10.
The other half is comprised of imports from the US and EU.
Sports, toys and leisure
More than half of these supplies are shipped from Asia, including an overwhelming 49 per cent from China - a powerhouse in toy manufacturing.
Hong Kong also accounts for 6 per cent, while the EU and US account for 30 per cent.
Homeware
China is by far the largest exporter of homeware goods to Britain, accounting for 44 per cent of overall exports.
Pakistan supplies 8 per cent of our products, and India is 6 per cent.
The EU accounts for 26 per cent and the US just 3 per cent.
IMPORTS LIKELY UNAFFECTED
Food and drink
The UK imports the overwhelming majority of its food and drink from the Continent: 74 per cent.
The remaining supplies are drawn from an array of countries that contribute a fraction of total imports.
The Asian country the UK imports the most food and drink from is Thailand, which supplies just 1.7 per cent.
Health and beauty products sold in the UK will likely have been manufactured on the Continent
Health and beauty
Health and beauty products sold in the UK will likely have been manufactured on the Continent.
The EU accounts for 69 per cent of total imports, while Switzerland produces 11 per cent. The US also produces 11 per cent.
By contrast, China, the biggest Asian exporter of health and beauty to the UK, only supplies 2.7 per cent of total goods.
DIY and gardening
While China does supply 14 per cent of gardening equipment to the UK, this figure is eclipsed by the EU's 61 per cent.
The US also exports 6 per cent and India 3 per cent.
Source: Retail Economics analysis of UK imports 2018Estimates of the value of cargo come from analytics firm Lloyd's List, which believes $5billion-worth of containers are sent westwards through the waterway each day. The value of eastbound traffic is slightly less, at $4.5billion.
The cargo makes up about 12 per cent of oceangoing trade each day, including around 10 per cent of oil and gas shipments.
As the backlog builds, costs for Ever Given's owners - Japanese firm Shoei Kisen KK - and their insurers will mount in what could turn out to be the world's most expensive traffic jam.
Industry experts warned the bill will likely total millions of dollars, even assuming the vessel can be moved quickly.
Insurers could find themselves on the hook for costs incurred by shipping firms whose routes are delayed, plus from Egyptian authorities which make almost $6billion each year charging companies for use of the canal.
The costs of the rescue operation will also fall on insurers, along with any damage the ship sustains while it is being salvaged, analysts said.
Attempting to head-off criticism, the ship's owners issued an apology today - saying they are 'extremely sorry' for the 'tremendous worry' that the accident has caused.
The firm said it is cooperating with its technical management company and the local authorities to get the ship afloat, but 'the operation is extremely difficult.'
'It is potentially the world's biggest ever container ship disaster without a ship going bang,' one shipping lawyer, who declined to be named, said.
Meanwhile Nick Sloane, a salvage master who helped refloat the Costa Concordia cruise ship after it ran aground off the coast of Italy, said rescuers' best chance of moving the vessel will come on Monday when tides will be at their highest point.
If that window is missed then it will take another two weeks for the opportunity to present itself again, he told Bloomberg. 'This is definitely not a quick refloat operation,' he added.
It is thought the accident happened after the ship's captain and two Egyptian pilots sent on board to help guide the vessel became blinded during a sandstorm with high winds that sent the vessel off course and caused it to get wedged around 7.45am on Tuesday.
While a gust of wind seems an unlikely culprit, it turns out that the Ever Given has past form of crashing during high winds, after being involved in an accident in the German port of Hamburg in 2019.
In February that year, the cargo ship was manoeuvering into port when a strong gust of wind pushed it off course and into a docked passenger ferry, Bild reports
The ferry, named Finkenwerder, was completely written off in the accident while three crew members were treated for shock - though thankfully there were no passengers on board.
Tracking data from Marine Traffic has revealed the extent of the jam, comparing a typical day last week with traffic yesterday, with ships piling up at either end of the waterway.
Bernhard Schulte Shipmanagement, the company that manages the Ever Given, said the ship's 25-member crew were safe and accounted for after the accident.
Canal service provider Leth Agencies said at least 150 ships were waiting for the Ever Given to be cleared, including vessels near Port Said on the Mediterranean Sea, Port Suez on the Red Sea and those already stuck in the canal system on Egypt's Great Bitter Lake.
Cargo ships already behind the Ever Given in the canal will be reversed south back to Port Suez to free the channel, Leth Agencies said. Authorities hope to do the same to the Ever Given when they can free it.
Evergreen Marine Corp, a major Taiwan-based shipping company that operates the ship, said in a statement that the Ever Given had been overcome by strong winds as it entered the canal from the Red Sea. None of its containers had sunk.
An Egyptian official, who spoke to The Associated Press on condition of anonymity because he was not authorised to brief journalists, similarly blamed a strong wind.
Satellite images reveal the precarious position the Ever Given finds herself in, with her bow embedded in the canal's eastern bank and her stern wedged against the western one
This image shows the extent of surrounding settlements (left) compared to the size of the ship (top right), giving a sense of the scale of the problem now facing rescuers
Rescuers are currently using diggers to try to free the bow of the ship which has become lodged in the eastern canal wall while dredgers and tugboats attempt to free the stern end, which is wedged against the western edge (top right). But experts warn that might not be enough, and that they may have to remove cargo to lessen her weight
Egyptian forecasters said high winds and a sandstorm plagued the area on Tuesday, with winds gusting as high as 30 miles per hour.
An initial report suggested the ship suffered a power blackout before the incident, something Bernhard Schulte Shipmanagement denied on Thursday.
'Initial investigations rule out any mechanical or engine failure as a cause of the grounding,' the company said.
Tuesday marked the second major crash involving the Ever Given in recent years.
In 2019, the cargo ship ran into a small ferry moored on the Elbe River in the German port city of Hamburg. Authorities at the time blamed strong wind for the collision, which severely damaged the ferry.
The closure could affect oil and gas shipments to Europe from the Mideast, which rely on the canal to avoid sailing around Africa. The price of international benchmark Brent crude stood at more than 63 dollars a barrel on Thursday.
The Ever Given, built in 2018 with a length of nearly 400 meters, or a quarter of a mile, and a width of 193 feet, is among the largest cargo ships in the world.
It can carry some 20,000 containers at a time. It previously had been at ports in China before heading toward Rotterdam in the Netherlands.
Opened in 1869, the Suez Canal provides a crucial link for oil, natural gas and cargo. It also remains one of Egypt's top foreign currency earners.
In 2015, the government of President Abdel-Fattah el-Sissi completed a major expansion of the canal, allowing it to accommodate the world's largest vessels.
However, the Ever Given ran aground south of that new portion of the canal.
This stranding marks just the latest setback to affect mariners amid the Covid crisis, with hundreds of thousands of people having been stuck aboard vessels due to the pandemic.
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Comparisons of ship tracking data shows a typical day in the life of the canal (left) with boats passing freely though, and how the situation appeared yesterday with ships piling up at either end
Several ships which were passing through the canal at the time the Ever Given got stuck are now waiting in Egypt's Bitter Sea, a body of water about halfway up its length, until they can move again
Why is the Suez Canal so important?
The Suez canal, which is around 120 miles long links the Persian Gulf and the Mediterranean and is the shortest shipping route between the Atlantic and the Indian Ocean.
Before the canal, shipping from Europe either had to go overland or risk going around Cape Horn and the South Atlantic.
In April 1859, construction of the canal officially begins, much of the work financed by France.
It was opened for navigation on November 17, 1869 for vessels from all countries, although the British government later wanted to have an armed force in the area to protect shipping interests having picked up a 44 per cent stake in the canal in 1875.
The Suez Canal links the Red Sea and the Mediterranean providing a short cut from the Indian Ocean to the Atlantic
From then, while nominally owned by Egypt, the canal was run by Britain and France until its until its nationalisation in 1956 .
The nationalisation by Nasser saw Britain and France launched an abortive and humiliating bid to recapture the vital waterway.
The canal was shut briefly following the attempted invasion.
However, in 1967 the canal was shut for eight years following the Six Day war with Israel.
Due to the instability in the region, the canal remained closed until 1975 - its longest ever closure, as the waterway had been mined and some vessels had been sunk in the main channel.
The Suez Canal is actually the first canal that directly links the Mediterranean Sea to the Red Sea.
In 2015 a new section of the canal opened, allowing vessels to traverse the waterway in both directions at the same time.
Future plans will see the two-lane system extended across the entire network- doubling current capacity of the canal.
The largest cargo vessels pay more than £180,000 in tolls to traverse the canal.
On average about 40-50 cargo vessels use the canal on a daily basis in a trip that takes around 11 hours, as speed along the waterway is limited to about 9kts to prevent the banks of the canal getting washed away.
Along the canal there are emergency mooring slots so vessels can pull over if they are suffering a mechanical issue.
When the canal first opened, the channel was approximately 26 feet deep and 72 feet wide at the bottom. The surface was between 200 and 300 feet wide to allow ships to pass.
By the 1960s, dredging of the canal increased the depth to 40 feet and widened the waterway to allow larger vessels.
Now, the minimum depth of the canal is 66feet, though this is been increased to 72 feet - allowing even larger vessels. What was the Suez Crisis
The 1956 Suez Crisis was prompted by Egyptian president Gamal Abdel Nasser who decided to nationalise the Suez Canal, which had been controlled for around a century by France and Britain.
Israel used the instability to invade Egypt and move towards the strategically important canal.
Britain and France sent troops to recapture the canal - claiming they wanted to return stability to the region - but in reality they wanted to force the collapse of Nasser's government and regain strategic control of the waterway.
The humiliation of the Suez crisis prompted Prime Minister Anthony Eden, pictured here in 1955 to resign after Britain was forced to withdraw from Egypt having lost the support of the United States
However, the United States refused to back Britain and France's action, forcing them to withdraw after the Egyptians were backed by the Soviet Union.
America threatened economic sanctions against Britain, France and Israel, forcing their withdrawal and their replacement by UN peacekeepers.
The humiliation prompted the resignation of British Prime Minister Anthony Eden
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