Suez Canal clogged by container lines, the number of fares rising for European and Mediterranean routes

Input 2021.03.25 09:06

Nearly 100 ships were tied in an accident where a super-sized container ship was stranded on the Suez Canal in Egypt. If accident handling is prolonged, it is likely to stimulate freight rates.

According to the shipping industry on the 25th, the ultra-large container ship’Ever Given’ operated by Taiwanese shipping company Evergreen stopped in the middle of the Suez Canal on the 22nd (local time). Congestion continues as a 400-meter-long container ship blocks the Suez Canal.

If you look at real-time maps of civilian ship tracking sites, you can see that more than 100 ships are actually stopped around the Evergiven. The Suez Canal, which connects the Mediterranean Sea and the Red Sea, is a key trading channel, with more than 50 ships on average per day.

Nationality HMM(011200)It has been confirmed that none of the container ships have entered the Suez Canal at present. However, all 12 ships of 24,000 TEU (1TEU = one 20ft container) that were put on European routes last year pass through the Suez Canal. If the accident response is prolonged, the route must be changed, and problems such as penalty fees will inevitably arise.

The Suez Canal Authority (SCA) aims to allow ships to move within the day. We are working to dig the sand around the hull with an excavator, but some believe it will take several days. Longer than this, ships will have to travel around the Cape of Good Hope in South Africa, which will take at least a week longer than passing through the Suez Canal.

There are also observations that the accident could stimulate fares on European and Mediterranean routes. According to the Shanghai Shipping Exchange, freight rates for container ships on Asia-Europe routes peaked after peaking at $4452 per TEU on January 8. In particular, the decline increased this month and fell to 3665 dollars on the 19th. However, if the ship schedule is twisted, there is a high possibility that fares will rise again. It is in the same context that fares for routes to North America, which are severely congested, do not go down.

An official from the shipping industry said, “Since operational disruptions on European routes are inevitable, even if it does not take long to deal with the accident, fares on European routes can increase in the short term.

The concerns of domestic export companies, which were burdened by logistics costs, are also expected to increase. As a result of a survey of 945 domestic export companies by the Korea International Trade Association, companies cited the biggest difficulties in the second quarter of this year:’Rising raw material prices (21.0%)’ and’Increasing logistics costs (20.3%).