On Wednesday, the Suez Canal published headlines. An Ever Given 59 feet wide container ship rammed the eastern bank of Suez Canal, one hundred and twenty miles long. The 1.300 feet, 200,000 ton ultra-large container ship travelled at the speed of 13 knots (15 mph), and arrived at a sudden end with its bow aground in Asia and its restful astern in Africa, blocking the waterway, through which 12 per cent of the world’s trades passed each year. As of Thursday, the Ever Given is still being dislodged by tugboats.
This is not a story you hear every day; sea logistics often do not cross the minds of most people, let alone get into national news. However, they are crucial to world trade nonetheless. The story is a clear reminder of the tenuous nature and the dangers of our global maritime supply chain.
The Suez Canal’s closure has huge consequences. This waterway is crossed daily with 3,3 million tons of cargo. On average, 50 ships come to the ports waiting for their day-long journey. All this means slowing the deliveries between Asia and Europe of goods, fuel and essential material. Factories may have to close depending on parts of Asia and essential goods and products may not be available for the battle of Covid-19. The cost of fuel could continue to increase, already high in Europe.
Ever Given could have been driven by a failure of equipment, human error, or natural events — winds high and visibility reduced. But its impact is far from its banks since it has blocked the legs of one of the most important trade routes in the history of humanity.
After ten years of excavation, the Suez Canal was inaugurated in November 1869 to much fanfare. It was a joint project between France and the United Kingdom that offered a quicker route to Asia than circumnavigating Africa. The vital waterway, which connected the Mediterranean Sea and the Indian Ocean through the Red Sea, was crucial to maritime trade. Turkish forces attempted to assault the canal from the east in the First World War, and General Erwin Rommel and the Afrika Korps attempted to do the same from the west in the Second World War.
Egyptian President Gamal Abdel Nasser nationalized the canal in 1956, after the war and at the height of anti-colonialism, precipitating the Suez Crisis with Israel, France, and the United Kingdom. As a result, it was forced to close until March 1957. After the Six-Day War in June 1967, the Suez Canal became the eight-year boundary between a warring Egypt and Israel. When the war broke out, more than a dozen ships — the Yellow Fleet — were stranded in the canal for the duration. The “Great Bitter Lake Association” was created by the crews of this foreign fleet, and they even held their own version of the Olympics. The ships were based there until 1975.
With the development of supertankers, very large crude carriers, this closure forced a revolution in maritime transportation. Ship designers designed ships that were too wide for the Suez Canal and had to sail around the Cape of Good Hope after the canal was closed. From supertankers to mega cruise ships and container ships like Ever Provided, transportation has benefited from economies of scale. Malcolm McLean, an American, coined the word “intermodalism” in 1956.
Instead of individual goods being loaded into a truck, then offloaded at a port, then loaded into a ship, and the process repeated, he invented the modular shipping container, which allowed for the movement of containers full of goods, streamlining the process. McLean could not have imagined a ship the size and scale of Ever Given when the SS Ideal X sailed from Newark, New Jersey, to Houston, Texas, with 58 containers on its deck.
Containerized freight accounted for approximately 40% of the 11 billion tons carried annually on the world’s oceans by 2020. Except for the 2008 recession, the tariff war between China and the United States, and the Covid-19 crisis in 2020, the movement of goods by container has continued to rise. The trade route between Eastern Asia and Europe is one of the most significant.
