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Global supply lines struggle to clear container backlog after Suez chaos

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JONATHAN SAUL AND TIMOTHY AEPPEL


A backlog of container ships carrying consumer goods has grown in some key strategic ports after a near week-long blockage in the Suez Canal, adding to ongoing disruptions to global trade, industry sources say.


Dozens of container ships were stuck when the 400-metre-long Ever Given ran aground in the canal on March 23, with specialist rescue teams taking almost a week to free the vessel.


The suspension of sailings through the waterway left shipping companies — including container lines — with millions of dollars in extra costs, which were not covered by insurance.


“The blockage of the Suez Canal will increase the negative impact on global supply chains in the coming weeks, as the availability of empty equipment, particularly in Asia and Europe, will be affected,” Reiner Heiken, chief executive of US headquartered Hellmann Worldwide Logistics, said.


Container shipping companies, carrying products ranging from mobile phones to designer goods, have been contending for months with disruptions caused by the coronavirus pandemic and a surge in demand for retail goods that led to wider logistical bottlenecks including in top consumer market the United States.


While some transporters of goods have turned to rail, that option has barely made a dent as about 90 per cent of world trade is transported by sea.


European and US retailers have warned about potential supply snags due to the impact from Suez.


Port officials in Europe’s leading gateways say the impact will be felt in coming days, adding to already stretched supply lines.


Barbara Janssens, with the Port of Antwerp, said the port and terminal operators were “already preparing for what’s ahead”.


“The impact on global supply chains is expected to last for several months. There is simply not enough spare capacity across the worldwide container ship fleet to help counter the worst effects of the Suez incident,” Janssens said.


Leon Willems, with the port of Rotterdam, said it expected its container traffic to be around 10 per cent higher than normal every day in the coming weeks.


“Both the port and container terminals are doing everything they can to minimise disruptions,” Willems said.


Maersk, the world’s number 1 container line, said in a customer note that vessels held up in Suez would be delayed for a number of days before they reached US East Coast ports. In an unusual step, the company urged the ports “to take this opportunity to clear cargo from terminals which will allow them to operate more efficiently”. — Reuters


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