April 20, 2021

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Editorial: Giant Ship Stranded Highlights Another Supply Chain Vulnerability on the Suez Canal


The satellite image on March 25 showed that the Changsui was blocking the Suez Canal, affecting the two-way traffic between the north and the south of the entire canal. (Reuters)

The satellite image on March 25 showed that the Changsui was blocking the Suez Canal, affecting the two-way traffic between the north and the south of the entire canal. (Reuters)

At 7:40 am local time on March 23rd, a rare major traffic accident occurred on the Suez Canal in Egypt. A 400-meter-long ultra-large container freighter, Changqi, suddenly ran aground, and its hull tilted sideways and blocked all of a sudden. The north-south traffic of the whole canal is completed.

This huge ship can load 20,000 labeled containers at a time. It is a giant on the sea. It enters the canal with a width of only 280 meters to the north end, which is even more huge. It was impossible for those who excavated the canal to imagine that there would be a freighter of such a large size and carrying capacity in the world, and it would bring unprecedented potential hazards to this canal.

The Suez Canal is the main throat linking the three continents of Asia, Africa, and Europe. About 30% of the world’s daily container traffic passes through this one hundred kilometer (the inland section from the entrance at the southern end to the Port Said lighthouse at the northern end is 163 kilometers long. The length of the canal from the waiting area in the south to the channel buoy at the north end is about 190 kilometers, which accounts for about 12% of the total global trade in goods. About 8% of the world’s liquefied natural gas and about 600,000 to 1 million barrels of crude oil per day are also transported through this canal.

The Minister of Transportation Wang Yikang described that the Suez Canal was blocked, just as a tree fell and blocked traffic on the Central Expressway, and other expressways connected to the Central Expressway would also be affected. However, it is obviously much easier to remove a fallen tree than this huge ship with a displacement of 220,000 tons. The possible impact of the paralysis of the canal on the world economy is even more incomparable.

What’s more unfortunate is that the accident happened when the shipping industry had just recovered from the devastating blow of the coronavirus epidemic, and the world was also facing a severe shortage of containers. The British media “Lloyd Ship Daily” estimates that every day the canal is “paralyzed”, it is equivalent to a loss of 9.6 billion U.S. dollars, and the value of traffic to the west is about 5.1 billion U.S. dollars and to the east is about 4.5 billion U.S. dollars.

At present, the most noteworthy thing is when will the giant wheel get out of trouble. Some experts estimate that it may not be possible to remove it until the tide rises next Sunday or next Monday. After several days of suspension of the canal, more than two hundred freighters have been forced to park at the entrances of the north and south ends of the canal, unable to move. The uncertainty caused by the indefinite time of the giant ship may also cause some chaos in the world’s shipping in the short term. According to reports, some ships are already discussing whether they must make a detour.

The occurrence of major traffic accidents on the canal highlights the potential dangers brought about by the emergence of super-large freighters in recent years, which does not seem to have received enough attention. People have focused their attention on the subject of free navigation, but this accident shows that the safety of navigation on some important waterways, such as the Suez Canal and the Strait of Malacca, must also receive the same attention.

For Singapore, this accident also highlights another vulnerability in the world’s supply chain. Globalization has brought unprecedented close interdependence between countries in the world. When the supply chain is suddenly interrupted, it will immediately trigger an unprecedented chain reaction.

The canal accident is a warning sign following the COVID-19 pandemic. Our position as a aviation and maritime hub is certainly closely related to the world’s supply chain, and our daily needs rely to a large extent on the world’s supply chain. How to ensure the resilience of the supply chain is a big issue for us.

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Facts show that, like the coronavirus that has swept the world suddenly, and the unexpected paralysis of canal traffic, we are not able to control it. When things happen, we can only try to respond as quickly as possible and reduce the damage as much as possible. But how to strengthen the resilience of the supply chain within a controllable range is a topic that we must discuss in depth.

The epidemic and the canal accident have repeatedly warned us. First, we must try our best to develop a diversified supply chain. Second, we must do our best to accumulate grain to prevent hunger, especially to make adequate reserves of energy, food, medical supplies, etc., and third, step up. Develop appropriate self-sufficiency.

Wang Yikang pointed out that the blockage of the canal means that goods shipped to the region may be temporarily blocked. Once the supply is interrupted, it is necessary to use some inventory. Fortunately, this accident only caused the huge ship to run aground, and part of the bow was inserted into the river bank. The hull was not tilted or damaged. I believe it will eventually be able to turn the tide.

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