Suez Canal blockage may disrupt trade
Exporters and importers are apprehending prolonged delays in shipments as efforts so far have failed to dislodge a massive container vessel that continues to choke traffic in both directions along the Suez Canal.
This shipping jam in one of the world's busiest shipping arteries is the worst in recent years.
About a quarter mile long (400 metres), the 224,000-tonne container vessel Ever Given ran aground diagonally across the single lane stretch of the southern canal on Tuesday morning during a dust storm.
As a result, it created another setback for global supply chains, which are already strained by chaotic congestions and a shortage of containers in many ports due to the impact of the pandemic.
On Wednesday, 185 vessels, mostly bulk carriers, container ships and oil or chemical tankers, were waiting to transit the 120-mile canal connecting the Red Sea with the Mediterranean, according to shipping data compiled by Bloomberg.
Roughly 30 per cent of the world's shipping container volume and about 12 per cent of global trade of all goods transit through the canal daily.
Shipping executives fear the fallout from the incident will last for days.
Around 80 per cent of the country's monthly export-load containers bound for ports in the EU, US and North American East coast cross through the canal, according to shipping executives as well as the exporters. A portion of the country's imported cargoes, including fruits from Egypt, also crosses the channel.
On average, 60,000 TEUs (twenty feet equivalent units) of loaded containers are exported from the country each month through Chattogram port.
Captain Giasuddin Chowdhury, country head of Orient Overseas Container Line (OOCL), says that an average of over 1,200 TEUs of Bangladeshi export containers bound for Europe, the US and Canada cross the canal every day.
If the traffic cannot be resumed by tomorrow, there may be four to five days delay in reaching these export cargoes to their destinations, he said.
Moreover, there would be a serious disruption in the berthing schedules for these vessels at regional hub ports once they start arriving here.
Cargoes would start piling up at the hub ports like that of Colombo, Singapore and Port Klang in a few days, said Khairul Alam Sujan, director of Bangladesh Freight Forwarders Association.
Nasir Uddin Chowdhury, chairman of the standing committee on port and shipping of the Bangladesh Garment Manufacturers and Exporters Association, said lead time of the export cargo would definitely be affected if the situation is prolonged.
The delay would further add to the supply chain disruption, slowing the delivery of cargoes to business across Europe and the US, bringing more loss to the trade, he feared.
SK Bashir Uddin, vice chairman of Bangladesh Oceangoing Ship Owners Association, said the jam was likely to affect both imports and exports.
A large portion of wheat comes through the canal, he said.
"The global freight market is already on fire. It is going to flare up," he added.