Suez Canal: crisis drags on as shipping rates surge
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.
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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.”