Latest efforts to free massive ship from Suez Canal fail - Here are the next steps

  • 🎬 Video
  • ℹ️ Description

The Ever Given, one of the world’s largest container ships, is still wedged in the Suez Canal, and the economic effects from the blockage — now in its fourth day — are beginning to unfold.

White House Press Secretary Jen Psaki said Friday that the U.S. is monitoring the situation closely. “We’ve offered U.S. assistance to Egyptian authorities to help reopen the canal...those conversations are ongoing,” she said during a press briefing, before adding that there could be “some potential impacts on energy markets.”

Oil prices jumped on Friday, amid speculation that dislodging the ship could take weeks. West Texas Intermediate crude futures and Brent crude each advanced more than 4%. The gains come after prices dipped on Thursday, despite the gridlock.

“Traders, in a change of heart, decided that the Suez Canal blockade is actually becoming more significant for oil flows and supply deliveries than they previously concluded,” said Paola Rodriguez-Masiu, vice president of oil markets at Rystad Energy.

Of the 39.2 million barrels per day of crude imported by seaborne methods in 2020, 1.74 million barrels per day passed through the Suez Canal, according to data from research firm Kpler.

This represents under 5% of total flows, but as the build-up stretches on, the impacts rise.

Bernhard Schulte Shipmanagement, the technical manager of the ship, said another attempt on Friday to re-float the cargo carrier proved unsuccessful.

A specialized suction dredger that can shift 2,000 cubic meters of material every hour is now on the site, and “arrangements are also being made for high-capacity pumps to reduce the water levels in the forward void space of the vessel and the bow thruster room,” the firm said Friday.

Bernhard Schulte added that two additional tugboats will arrive by Sunday to help in the re-float operation.

Douglas Kent, executive vice president of strategy and alliances at the Association for Supply Chain Management, noted that even after the ship is dislodged the impacts will continue to be felt. Ships will arrive at ports simultaneously creating new traffic jams, for instance. Cargo schedules created months in advance will need to be reshuffled with ships now sitting in the wrong place.

More importantly, there’s a lack of visibility throughout the entire supply chain.

“The whole knock-on effect through the multi-hierarchy of the supply base — we’re not going to know that,” Kent said. “Companies don’t have visibility into their supply chain.” While a company might know it has a product sitting on a ship that’s stopped, the impact of delays down the line are unknown.

The Suez Canal handles around 12% of global trade, making it an essential point of passage. Each day of blockage disrupts more than $9 billion worth of goods, according to Lloyd’s List, which translates to about $400 million per hour.

Some ship operators have already decided to re-route their vessels, anticipating that the Ever Given won’t be dislodged soon. Sending ships around the Cape of Good Hope adds more than a week of sailing, while also increasing costs.

“It’s a terrible mess,” said Anthony Fullbrook, president of OEC Group’s North American region.

The disruption caused by the backlog in the Suez Canal comes as global supply chains are already strained by Covid-19.

“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.

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

Connect with CNBC News Online


💬 Comments on the video

When you screw up so bad it's visible from space.

Author — Jim Mooney


That ship is basically the pandemic personified. It went sideways, stopped all travel and brought the whole economy down. Now everyone is trying to get it to go away, but it won't budge and the news reports that there is no end in sight.

Author — dkwroot


The captain: *this little maneuver is gonna cost us 15 million years*

Author — Mr Cheese


Amazon 2 day shipping: "On the way, but it's running late."

Author — Kaitlyn


"Boss, the economy is recovering"
Bogdanoff: "Block the canal"

Author — Petra Severin


I went through this canal when I was a Merchant Marine. We even encountered the pirates off of the coast of Somalia on our way to Alexandria Egypt. I know my comment has absolutely nothing to do with this video clip. I just wanted to share that because I remember that canal.

Author — liveyourlife1777


This is how you make global economics trades go down with just a simple yet weird way.

Author — X


I’m loving this poop sandwich situation. I guess my cup noodles is about to be 15¢ more expensive?!

Author — Rick Flair


Hoping Everything Works Out For This Ship In The Suez Canal

Author — Nidia Luccioni


When the news updates you every ten minutes on a situation that has literally not changed in four days.

Author — Sewer Tapes


Owner: Japanese
Operator: Taiwan
Goods from: China
Registered in: Panama
Crew: Indian
Stuck in: Egypt

Author — Skandan Kashyap


"That route is longer."

What one?

That one that goes all the way around Africa?

Ya. Ya, it is longer.

Author — Grovesie35


Pirates are excited, so many business opportunities coming their way.

Author — ccrpalex


WOW!!! I can't believe that Captain actually
that thing!! 🤓 Yea Baby!!

Author — Walter White


At least the captain has a funny story to tell at parties when people ask about embarrassing moments 😂😂

Author — Robert Apostu


its absolutely insane how that thing is floating, cool af

Author — Jonas W


So that's why my $7 "airpods" from wish never came.

Author — Hawk Eye Aerial Photography


All my training in playing sea of thieves has prepared me for this moment.

Author — BingeV


It's amazing how the wind doesn't push it back into the channel.

Author — one one


This is what happens when there hasn't been any improvements to nautical engineering.
But yet, they still proceed to overload these cargo ships.

Author — Quons Lecn