With the blocking of traffic on the Suez Canal by a stranded cargo ship, more than 200 ships with billions of dollars worth of goods were also trapped, but the exact economic consequences will depend on the duration of the paralysis.
The blockade “could not come at a worse time for the most used channel” in the world, amid the coronavirus pandemic, comments Jonathan Owens, a logistics specialist at the University of Salford Business School.
The total value of goods blocked or due to follow another route differs according to the information: from 3 billion dollars a day, according to Jonathan Owens, to 9.6 billion, according to Lloyd’s List, British magazine of maritime transport.
“Given the large number of parties affected by the situation, directly and indirectly, it is impossible at this level to quantify the value of overdue goods,” says Daniel Harlid, an analyst at Moody’s.
The blockade does not automatically mean loss, Jai Sharma, a lawyer specializing in shipping for the Clyde and Co. office, told AFP.
Although it is possible to calculate the billions of dollars of delayed goods, the impact on companies and possible chain reactions cannot yet be quantified and will depend on the reserves they have.
For the oil sector, the problem would be less serious, since only 1.74 billion barrels pass through the channel daily. Of the little oil from the Gulf that goes to Europe, 80% goes through the Sumed pipeline, said Paola Rodríguez Masiu, of Rystad Energy. And the pipeline also has available capacity.
Now, operators face the dilemma of waiting for the channel to reopen or losing a week or ten days to make the detour through Africa passing through the Cape of Good Hope.
That’s what shipping giant Maersk and Germany’s Hapag-Lloyd plan to do.
That deviation can be estimated at hundreds of thousands of dollars per ship, or an extra cost between 15 and 20%, calculated for AFP Plamen Natzkoff, an analyst at VesselsValue.
And that taking into account that the vast majority of trips, up to 90%, are not insured against delays, emphasizes Lloyd’s List.
Citing observers, the magazine indicates that many disputes must come around to determine who will pay.
Regarding operations to remove the ship, the bill will be large, of “several million” dollars, according to Jai Sharma, especially if it is necessary to unload a part of the cargo.
However, “cargo carrier insurance policies are usually signed by several insurers, sometimes foreign, so losses will be shared between insurers,” says Soichiro Makimoto, an analyst at Moody’s.