World trade hit as Suez Canal shuts due to giant ship running aground

<p>
A huge container ship that ran aground is blocking the Suez Canal hit global trade on Thursday as officials stopped all ships entering the channel and the salvage company said it may take weeks to free.</p>
<p>
The rescue boats are working to float and release the Ever Given, a 59-metre-wide vessel that ran aground after 40-knot winds and a sandstorm caused low visibility and poor navigation, the Suez Canal Authority said in a statement Wednesday.</p>
<p>
The 400 m Ever Given is blocking movement in both directions through one of the world’s busiest shipping channels for oil and other trade between Asia and Europe.</p>
<p>
A total of 156 large container ships, tankers carrying oil and gas, and bulk vessels hauling grain have backed up at either end of the canal, Egypt’s Leith Agencies said, creating one of the worst shipping jams seen for years.</p>
<p>
While Saudi Arabia and the Gulf countries are the top exporters of oil through the canal, India and China are the main importers.</p>
<p>
The blockage comes on top of the disruption to world trade already caused in the past year by Covid-19, with trade volumes hit by high rates of ship cancellations, shortages of containers and slower handling speeds at ports.</p>
<p>
The SCA, which had allowed some vessels to enter the canal in the hope the blockage could be cleared, said it had temporarily suspended all traffic on Thursday.</p>
<p>
Roughly 30% of the world’s shipping container volume transits through the 193 km Suez Canal daily, and about 12% of total global trade of all goods.</p>
<p>
Shipping experts say that if the blockage is not cleared in the coming days, some shipping may re-route around Africa, which would add another week to the journey.</p>
<p>
Consultancy Wood Mackenzie said the biggest impact was on container shipping, but there were also a total of 16 laden crude and product oil tankers due to sail through the canal and now delayed.</p>
<p>
The tankers were carrying 870,000 tonnes of crude and 670,000 tonnes of clean oil products such as gasoline, naphtha and diesel, it said.</p>
<p>
Japanese shipowner Shoei Kisen apologised for the incident and said work on freeing the ship, which was heading to Europe from China, “has been extremely difficult” and it was not clear when the vessel would float again.</p>
<p>
The owner and insurers face claims totalling millions of dollars even if the ship is refloated quickly, according to industry sources.</p>