Efforts to Dislodge the Ever Given Intensify
The ship’s names is Ever Given but the logo reads EverGreen.
Image is from CNN Efforts to dislodge stranded Suez Canal container ship intensify as backlog grows
Major Macroeconomic Shock to Europe
This strange-looking accident constitutes a major macroeconomic shock for Europe. Germany reminded us yesterday that 9% of its export go through the Suez canal, and a much bigger proportion of its chemical trade. As we saw at the beginning of the pandemic, industrial supply chains are sensitive, even to small disturbances in transportation infrastructure. And this is a big disturbance.
Hundreds of ships are stuck. Some are now re-routed to the pre-Suez route around South Africa. That’s an extra 10 days of travel. What makes the situation worse is that air transport cannot take up the slack, while demand for Asia-made products is high. FAZ has done the math on container shipping costs – which have gone up from a previous $1500 to $9000. Oil prices has already risen by 6% since the ship stranded. The share prices of shipping companies has fallen.
Even by the standards of modern container ships, the Ever Given is huge. 400m long, it is one of the world’s largest. Dutch rescue teams will eventually get it unstuck, but it will take a while until the Suez Canal can be used again, and the backlog of ships clears. The accident will have damaged the canal’s infrastructure, which also needs to be repaired before normal operations can resume.
This will be a V-shaped shock no doubt, but coming at a time like this, it is the last thing the trade-dependent European economy needs. Sacks of rice no longer fall over in modern China. But containers that travel from Malaysia do – kind of.
The above view from Eurointelligence.
What Might Help the Free the 300 Ship Blockage in the Suez Canal
For background information, conflicting time estimates on when the blockage may be fixed, and details of the Ever Given, please see Why a Full Moon Might Help the Free the 300 Ship Blockage in the Suez Canal
Mish
Being involved in shipping for years I never got all the craziness on this issue. First off, moving the ship will be simple, its just a case of a big enough pully system. I understand that the ship has now been moved to the side of the canal and that traffic should resume, at a lower flow, untilt he ship is removed. They may have to bring cranes to unload the ship partially, but then again maybe not. It all depends on the bottom damage that the vessel suffered.
A storm in a thea cup,, again. I even read an article that said that this would cause toilet paper shortages…
Proof if none was needed how journalists are lazy and don’t even check the simplest fact. Some German Bozzo even suggested that there was no ship large enough to pull the vessel away from the shore…when in fact all that was irrelevant. since they can have onshore systems that will exactly pull the vessel in the right direction
Another manufactured crisis which was essentially resolved over the weekend.
On the other hand, the stuff in China is getting interesting with the push back against Canada, the US and Australia.
Just a few minutes ago, the vessel is being towed away as we speak. Crisis averted now just some traffic to manage
The most ridiculous predictions were made about the global economy as if supply chains could not be rerouted.
Russia is pitching sending ship traffic through the North Sea as an alternative. Supposedly 50% shorter in miles. Why not?
Russia Pitches Frosty Arctic Sea Route As Superior Alternative To Blocked Suez Canal
Saturday, Mar 27, 2021 – 01:05 PM
As the world waits to see if the US Navy personnel dispatched to the Suez Canal will succeed in freeing the boat (after a successful “partial refloating” that appears to have been a dry run for a more comprehensive effort once the Americans arrive), Russia sees an opportunity to promote a potential alternative, as more container ships are re-directed around the Cape of Good Hope to complete their journey from Asia to Europe.
Indeed, as RT reports, Russian energy giant Rosatom is promoting a North Sea route (recently cleared of dangerous ice flows). The effort started with a series of half-joking tweets sent last night. In the thread, Rosatom offered three reasons why Russia’s strategic shipping route through the Arctic might be a viable alternative to the Suez, despite the cold and the ice. Fortunately, as Rosatom pointed out, if a container ship gets stuck in the ice, an ice-breaker ship could be quickly dispatched to help.
….
link to zerohedge.com
Get ready to unload, which is easier said than done. Apparently the cranes aren’t there and the sandy banks of the Nile are far from ideal. Wonder if there will now be a size limit on ships
link to ft.com
One would think that Egypt would have had cranes there by now, just in case. But that would have been a sign of a competent government.
The economic equivalent of a blocked coronary artery.
And the world is suffering a heart attack! Good analogy.
The absolute truth about what really grounded the ship – In 30 seconds !!
link to youtube.com
How many more of these “one-time” supply chain disruptions will it take before on-shoring makes events like these trivial? One supply chain disruption (like COVID) should have been a wake-up call. Now there is another (Suez Canal blockage). Taiwan’s drought is quickly becoming enough of a disruption to shut factories in the US that make automobile electronics.
Time to call International Rescue. Thunderbirds are go!
LOL. Great show. Some episodes on youtube. I found SpaceGiants on there as well.
Lataire wrote his dissertation on a similar phenomenon as a ship passes close to a bank: the bank effect. The water speeds up, the pressure drops, the stern pulls into the bank and, particularly in shallow water, the bow gets pushed away. Stern one way, bow the other. A boat that had been steaming is suddenly spinning. It’s a well-identified phenomenon; in 2009 Ghent University’s Shallow Water Knowledge Centre put together a whole conference about it. Clever pilots on the Elbe, according to Lataire, will use it to shoot around a bend.
link to twitter.com
Take a sledgehammer to a rickety economy held together with baling wire, bubble gum, and fervent wishes, and it might collapse. You never know…
Is this what you mean?
The cost to ship a 40-foot container from China to Europe has climbed to about $8,000, almost quadruple the figure a year ago.
With the canal potentially out of commission for weeks, shippers are now weighing the cost of rerouting their vessels around Africa. It’s not an easy decision. Sailing around the Cape of Good Hope adds 6,000 miles (9,650 kilometers) to the journey, and fuel costs alone would be about $300,000 for a supertanker delivering Middle East oil to Europe.
I still no no what a FAZ is
link to bloomberg.com
What is FAZ? What exactly increased by $9,000? The cost to have a ship complete its journey? You really should spell this out? If FAZ is an entity, the acronym should not be the sole reference. Its not a term like OPEC. Apologies but unless I missed it in your post this is impossible to follow.
It’s the Football Association of Zambia, obviously. 😉
I’m sure he is referring to the Frankfurter Allgemeine Zeitung, a newspaper.
Note that the reference to FAZ is not by Mish, but is contained in the article from Eurointelligence that he quoted. Eurointelligence may take it for granted that their readers know FAZ, just as in the US we would know that “NYT” referred to the New York Times, but a European reader might not.
Still doesn’t excuse it. He cut and pasted something his readers had almost no hope of understanding. Where’s the value in that? If thus is the excuse it’s a lazy one
Since Mish reads a lot more European news than I do, I suspect he knows FAZ as well as we know NYT, and he probably didn’t even think about it. In any case, it took only a few seconds to figure out who they were.
….INDEED ….I do HATE fckn, fucking rather, abbreviations and acronyms !
Well…the western alphabet started as an abjad, so maybe it is the memory of that that psss ppl ff. I dnt knw, nd m nt sggstng tht yr tht ld r nthng.
That was meant to be for FrmBrssls.
Some costs will be easily qualified others not. Insurers will get hit. US navy may be called upon to escort ships going around Africa and worried about pirates. And then you have production stops from delayed components