The Suez Canal Crisis

By: Amalya Teitelbaum Business Editor Social Media Manager  |  April 30, 2021

By Amalya Teitelbaum, Business Editor & Social Media Manager

If you have access to any sort of social media, it would have been nearly impossible not to have heard about the blocking of the Suez Canal. The Suez Canal, which runs north to south across the Isthmus of Suez in north-eastern Egypt, required over a million workers and 10 years to build, and it was blocked by a single ship. In March 2021, the canal was blocked for six days after the grounding of Ever Given, a 20,000 TEU container ship.

Now how exactly did a giant ship get stuck in the canal? It is not exactly your typical everyday occurrence. To sum it up, after powerful winds forced the ship aground on one of the canal’s banks, it was big enough to block nearly the entire width of the canal, producing a large traffic jam in one of the world’s most important maritime arteries. This caused the blockage of hundreds of ships on each side of the canal. This of course had a major impact on commerce and businesses. 

“Aside from the delays directly caused by the closure, there is the inevitable bunching of vessels that occurs as they call at their next ports and as we work through these clashes, we will feel the ripple effects of this closure for some weeks to come,” Ahmed Bashir, Maersk’s head of Global Execution Centres, said in a video posted by the company on YouTube. Thousands upon thousands of materials and goods were blocked on their journey to certain ports. These shipping delays could impact everything from clothes to utensils to highly necessary medications. According to Agence France-Presse, experts estimate that between $3 and 9.6 billion worth of goods is now stuck or delayed in transit because of the Ever Green’s mishap. Take oil, for example, a substantial amount of it is transferred through the Suez Canal. Between 5% and 10% of all seaborne oil is transported through the Suez, meaning that for each day that the ship remains stuck, it delays the shipment of another 3 million to 5 million barrels of oil per day.

The Guardian as well reported that at least 20 blocked ships had livestock on them. So besides the concern of people receiving goods on time, there is now concern regarding the wellbeing of the livestock. Gerit Weidinger, the EU coordinator for Animals International, told the Guardian: My greatest fear is that animals run out of food and water and they get stuck on the ships because they cannot be unloaded somewhere else for paperwork reasons. … Getting stuck on board means there is a risk [for the animals] of starvation, dehydration, injuries, waste buildup so they can’t lie down, and nor can the crew get rid of dead animal bodies in the [Suez] canal. It’s basically a ticking biohazard timebomb for animals and the crew and any person involved.

The Suez Canal handles over 10% of global trade, making it an essential passage. Each blocked day disrupted billions of dollars worth of goods. Some companies started telling their ships to reroute, others were stuck there for days. “It’s a terrible mess,” said Anthony Fullbrook, president of OEC Group’s North American region. “There’s already a shortage of equipment, of space, everything’s operating at peak capacity … It’s already slowly melting down, and this will just exacerbate it,” he added.

Thankfully the blockage ended on March 29, with the final blocked ship passing through on April 3. But as Ahmed Bashir, Maersk’s Head of Global Execution Centres said, it could be weeks before trade and commerce are back to normal. Who knew a boat could cause so much trouble?