by | May 18, 2021 | Business

Waterway trade is one of the biggest means of transporting goods for export in Africa and other parts of the world. The Suez Canal is a waterway located in Egypt, connecting the Mediterranean Sea to the Red Sea through the Isthmus of Suez and dividing Africa and Asia. The canal is part of the Silk Road that connects Europe with Asia. About 10 percent of world trade flows through the canal, a pivotal source of foreign currency to Egypt. About 19,000 vessels passed through the canal last year, transporting goods according.

Transportation and logistics. Premium Photo

Between March 23-29 a 1,300ft-long container ship, named Ever Given, blocked traffic at the entrance of Egypt’s Suez Canal, however, the vessel was eventually freed on the 29th of March 29 after six frantic days of struggling, but the blockade resulting from this occurrence leftover 200 ships stranded at the two ends of the canal. This problem modollarsurther pressure on global trade during a period when it was already feeling the strain due to the economic effects of the COVID-19 pandemic. The blockade held up billions of dollars worth of trade goods. About one million barrels of oil, eight percent of liquified natural gas, and a total of 12 percent of global trade pass through the canal each day. This amounts to a loss of nearly £7bn of goods a day, which is approximate £290man hour. This had a very profound effect on the global trade market for several weeks, as the Suez Canal is an important trade route between the East and the West.

Due to high tides and winds, the ship became wedged on the east bank and lodged diagonally. The salvaging company put in charge of rescuing the ship described it as a ‘beached whale’ as the Golden-class container ship represented an enormous weight on the sand. Even after the vessel was freed, and trade resumed, there has been a massive backlog of vessels that are still trying to pass. There was disruption and even congestion at some ports and further exacerbation of supply chains which were already reeling from container shortages. As a result, assembly lines were left idle as ships did not arrive in time. Due to this blockage, there had to be re-routing of many ships towards the Cape of Good Hope in South Africa, which caused a delay of almost eight days for shipment. Due to this re-routing, vehicles average an additional £18,000 a day in fuel costs.

This was however not the first time the Suez Canal has been blocked; it had been blocked over five times since its opening in 1869. Those blockages were mostly intentional due to increased political tension between countries. Nowadays ships are built much larger for efficacy, but Ever Given (the blocked ship) could not withstand the bad weather despite its size. This incident did not only affect shippers, but it also disrupted the works of customers, as prices increased and will continue to increase until supply chains return to normalcy. However, this vessel has single-handedly managed to highlight the weak links in the global supply chain.

Following this scenario, Egypt has recently announced plans to widen and deepen the southern part of the Suez Canal where the hulking vessel ran aground and closed off the crucial waterway in March. The details of the plan were announced by the head of the Suez Canal Authority, Lt Gen Osama Rabie, announced in a televised ceremony in the canal’s city of Ismailia. Egyptian President Abdel-Fattah el-Sissi and top government officials attended the ceremony. The announcement revealed that the plan of the expansion includes widening of the canal’s southernmost stretch by about 40 meters (yards) to the east, on the side of the Sinai Peninsula. The segment would also be deepened to 72 feet, from the current 66 feet in depth. That part of the canal is 30 kilometers (18 miles) long. The plan also includes a 10-kilometer-long extension of a second lane of the waterway that opened in 2015. That would bring the double-lane stretch of the canal to 82 kilometers, or 60 miles, allowing more vessels to pass through the canal.

The Ever Given, the Panama-flagged, Japanese-owned ship that blocked the canal in March, had run aground in the single-lane stretch of the canal before it was extracted after a massive salvage effort by a flotilla of tugboats. The vessel is still held in the canal’s Great Bitter Lake and there has been a resulting financial dispute between its owners and the Suez Canal Authority.

This expansion plan is a welcome development as the blockage in March has shown that the Suez canal was not structured in a way to cater for extremely large vessels like the Ever given, we hope the expansion is executed as soon as can be done, to eradicate or minimize the challenges caused by this blockage, this expansion would also result in increased supply chain activities across Africa and export to other parts of the globe as it would mean that more vessels would be transported and even larger goods can be conveyed through the Suez canal.


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