As the world absorbed the fact that the Suez Canal would almost certainly remain closed for at least a few days, on Friday, hundreds of ships stranded at both ends of the tide began to think of a much more expensive alternative: leave the tide and travel a long way. Around Africa.
It usually takes about 11 days from the Suez Canal in Egypt to Rotterdam, the Netherlands, Europe’s largest port. Dealing with the southern hemisphere around the “Cape of Hope” in Africa adds at least 26 days, according to Refinitiv, a financial data company.
The extra fuel charges for the voyage generally exceed $ 30,000 per day depending on the ship, or more than $ 800,000 total for longer voyages. But the other option is to sit at the entrance to the canal and wait for the mother of all the floating blockages to disperse, while at the same time charging for so-called drainage fees, late payloads that range from $ 15,000 to $ 30,000 a day.
“You either stay in the product, you wait for the events to happen, or you take the cost, you move your product, you release your ship,” said Amrit Singh, chief shipping analyst at Refinitiv in London. “People have started making decisions.”
One of the world’s largest containers, Ever Given, has been stranded in the Suez Canal since Tuesday due to strong winds.
The disruption of the global maritime industry is reminiscent of why the Suez Canal was built in the first place. Only the Panama Canal is so large in the transportation of goods around the planet.
Almost every container ship that sails from the factories of Asia to the rich consumer markets of Europe passes through the Ually. The same goes for tankers loaded with oil and natural gas.
The Ood canal shutdown affects up to 15% of the world’s freight capacity, according to Moody’s Investor Service, leading to delays in ports around the world. Trucks carrying 9.8 million barrels of oil, which make up one-tenth of the world’s daily consumption, are now waiting to enter the canal, according to Kpler, which tracks oil deliveries.
Already, the industry, which relies on freight to supply parts and finished products, is struggling. The automotive industry is particularly vulnerable given its dependence on so-called timely production. Clothing: retailers were already struggling with delays due to the large wave of orders spurred by the epidemic.
The world, whose initial experience with the coronavirus involved the accumulation of toilet paper, is now experiencing a new shortage of this important product. Like many consumer goods, paper products are transported in giant containers across the Suez Canal.
More than 200 ships are now stranded at both ends of the Suez Canal, without specifying when they will be able to continue their voyages. About 80 additional ships are expected to arrive in the next three days, Singh said.
For ships sailing from Asia to Europe at the southern tip of the canal, the route around Africa involves passing through a pirate-infested area of Somalia. Some ships carry security teams that allow them to cross the pirate zone. Those who do not have a guard should go around it, adding three more days to their travels.
Crews may be unfamiliar with the waters around the southern tip of Africa, where the convergence of hot and cold currents creates turbulent, unpredictable conditions. Early Portuguese sailors called this area the “cover of storms”.
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“It’s like picking a queue at the post office,” said Alex Booth, head of research at Kpler. “It is never the right decision.”
According to Kpler, the seven giant carriers of liquefied natural gas seem to have decided to change course away from the canal.
One of the ships, hired by the Royal Dutch Shell, was carrying a cargo of gas in the Sabin Pass, Texas, on its way to the canal when it made a sharp turn in the Atlantic Ocean to Africa. Another, operated by the Katargas State Energy Company, loaded in Ras Lafan, Qatar’s energy hub, headed for Suez but then diverted to Cape of Hope before reaching the Red Sea.
Container ships are also changing their plans. HMM, a South Korean cargo company, ordered one of its ships bound for Asia via a canal to sail to Africa instead, said NOH Ji-hwan, a spokesman for the company.
Booth said a ship already waiting for the canal was unlikely to set sail for Africa. That would mean a nearly six-week journey to Amsterdam in just 13 days from the canal.
If the bell rings at the beginning of the journey, it may make sense. For example, Kepler estimates that it will take 39 days to travel around the cape from the Ras Tanura oil terminal in Saudi Arabia, while 24 days via the Suez Canal.
Ultimately, the decision depends on the time required by the engineers to extract Ever, allowing the route to resume. The most optimistic outlook on Friday dealt a major blow to the failure of the last attempt to sail the huge ship.
“People say something will be done by Sunday,” Singh told Refinitiv. “But I have my little doubts. “Tidal conditions are more favorable in the middle of next week.”