Chaos Not Far Away
I find it alarming on how the Suez Canal blockage is being treated and how limited the resources are considering what is at stake. This is not just a traffic jam and everything gets back to normal once it is cleared as this is a lot more complex than that. Not forgetting about the 11 livestock carriers with thousands of cattle on board waiting in the queue and whether they will have to make some decisions soon.
One doesn't have to be a genius to understand that as everyday that passes the problem becomes much more serious. This is my take on it by just doing a few calculations and having experience in the logistics world.
The canal is 193 km long and takes an average of 20 hours for a vessel to pass through. On average 51 vessels pass through per day so lets triple that figure to 150 as there will be a mad rush once the canal is open. Every day the queue is getting bigger and from reports that number is already exceeding 500 vessels which is more than 3 days wait. If ships don't decide to divert to the alternative route by Monday there could be 1 weeks delay just in queueing times.
source HMM Rotterdam decided last night to change course and skip the Suez Canal on route to Singapore.
Some shipping companies have already made the call as you can see from the diagram above. This is a tough one as depending on the vessel it could add an extra 2 weeks to the voyage and is a gamble that could prove to be a smart one. What happens if the blockage hasn't been removed by Wednesday or Thursday next week? Will we see other vessels leaving the queue to join everyone else going around Africa?
One telling move is by the Evergreen Lines whose boat is currently blocking the canal by diverting their vessel the Ever Greet from it's normal planned route from Malaysia to Rotterdam now via the Cape. If they were so confident why not just wait and sit this thing out as it will be free by Monday? Sounds like bullshit to me and why I think the crane may be coming into play.
The one question is what is going to happen next as there is talks saying the bow has full use of it's rudder and propellers now. Everyone is waiting for nature to help with a spring tide on Monday which is expected to raise the water levels by 18 inches or 45 cm. the telling sign is the red paint on the hull which is visible and with the load on board should be well below the water line.
source Asking for miracles for a Spring tide to shift that. That is not sand that is clay and how many meters is the vessel embedded. The salvagers are talking about the suction effect which makes pulling it out almost impossible in it's current situation.
The biggest fear is the sagging effect as the vessel is experiencing un natural forces which it is not designed for. Divers are monitoring for cracks so this is not over as things can change quickly. More tugs are on their way and spotted a Russian tug on vesseltrack a day out. another danger is not the cracking of the hull but tearing the vessel by using too much force. Boat designs changed in the last 20 years and hull's are not as thick as they once were. The entire structure relies on itself to maintain it's strength and any weak spots will see the structure being compromised.
You will see the land crane in the diagram above which needs to be assembled in order to be back up if all else fails. This is the worst case scenario as off loading to help relieve stresses on the hull plus help raise the weight so the vessel can start floating. This scenario with an estimated 600 containers being removed could take weeks on it's own and what next? Do those containers get re loaded onto another vessel or are trucked somewhere else? Dredging would then need to make the canal safe as the bottom would have changed from what has been going on over the last 5 or 6 days.
source Port of Barcelona today will start to show signs over the coming days as containers start to build up. Lets forget about the blockage as elsewhere is where the problems are just getting bigger. Every shipping port is still receiving containers which have been booked for ships that were supposed to be in the various ports already. Add another 4 or 5 days to this and you have a shambles. The vessels are bigger than ever today with the biggest carrying 24 000 containers so having one or two or 5 of these delayed is rather serious.
Shipping experts predict that the percentage of containers stacking up could exceed 25% of Europe's container stocks leaving very little as the world is still suffering from a massive shortage.
Not only is the container problem mounting every day but once the canal is open vessels can expect delays in ports which is already expected to turn from days into weeks. When you have a schedule that runs like clockwork and change things it can take double the time to rectify. With logistics there are many components that form it's cogs and warehousing is one that is going to be put under immense pressure right now along with trucking. Ports will not be able to receive containers soon so meaning everything comes to a grinding halt.
This knock on effect is not about the lost trade flowing between the Suez Canal estimated at $400 Million per hour, but every factory that exports as well. if retailers receive their goods 1 month late they are not going to order extra as that is just lost sales for that period as somewhere they will have to reduce what is on order further in the year creating a knock on effect. The goods on the vessels right now would be expected in stores for early March and looking at schedules right now mid March is looking like the earliest they will receive them so the 5 days has cost them 2 weeks so far.
5 years ago we had a port strike in Durban South Africa and the problems encountered after everything happened was delays in deliveries as there just wasn't the number of trucks to maintain what was required. For every day the port was disrupted we could add an extra day on for delivery as this is the reality.
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