Evergreen Marine’s giant container ship Chang Chi is stuck in the Suez Canal. How much is this sea traffic jam of the century costing the world? The shortest answer: a lot, a lot.
It is difficult to put a single figure that covers all dimensions, and the cost depends on the number of days the ship is stuck in the Suez Canal. The grounding of the Chang Chi has pushed shipping costs sky-high; about $10 billion worth of oil and cargo is shipped through the Suez Canal daily.
Bloomberg reports that the cost of shipping a 40-foot container from China to Europe has climbed to about $8,000, almost four times the amount a year ago.
The Suez Canal traffic knot has also increased profits for tankers that do not pass through the canal. Very large tankers (VLCCs) sailing from the Middle East to China have seen their daily profit rise to $1,371 per tanker, their second daily profit in more than seven weeks.
Suezmax tankers, which can carry 1 million barrels of oil per day, saw their daily profit surge to $17,000, the highest since June last year. Caterpillar, a major U.S. heavy equipment manufacturer, also suffered delays in its shipments and will consider switching to air freight depending on demand.
As the Suez Canal may be impassable for weeks, shipping operators are assessing the cost of detouring container ships through Africa. It is a difficult decision. For a very large tanker sailing from the Middle East to Europe, a detour through the Cape of Good Hope would represent a dramatic increase of 9,650 kilometers, with fuel costs alone expected to increase by $300,000.
The long-haul vessel remains stranded in the Suez Canal.
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