The Suez Canal Crisis: Explained In a Snip!

Some facts about the Canal

  • Suez Canal is a stretch of waterway which separates the Asian and African Continents.
  • It is 120 miles or 193 kilometers in length.
  • It starts from Port Said in the north and ends in Suez in the South.
  • It took 10 years for its construction to complete and was opened for the first time on 16 November 1869.
  • The maximum depth is at 24m.
  • It is managed by the Suez Canal Authority of Egypt.
  • The Statue of Liberty was initially intended to be a lighthouse at its Mediterranean entrance by the French sculptor Frédéric-Auguste Bartholdi, but it did not come to materialize. In 1886, he finally unveiled it in New York Harbor.

Why is it significant?

  • It is the shortest maritime route between Europe and Asia. Before its construction, vessels had to go around South Africa, through the Cape of Good Hope – which is basically around the whole African Continent, adding about 2 more weeks time to reach Asia.
  • It helps approximately 12% of global trade to happen.

The Crisis

About a week ago, on March 23rd, the ship – Ever Given, run by the Taiwanese Shipping Company Evergreen Marine ran aground and got stuck sideways in the Suez Canal.

The ship is 400m long(1312 ft) or the size of approximately 4 football pitches and 59m wide(194 ft). The canal on the other hand is 205m wide.

USA Today

The ship ran aground after strong winds and a sandstorm caused low visibility and poor navigation

 Osama Rabie, Suez Canal Authority chief

The Ramifications

  • Being a significant passage, it was an important enabler for global trade. About 12% of global trade, around 1,000,000 barrels of oil and roughly 8% of liquefied natural gas pass through the canal each day.
  • According to SCA chair, the canal’s revenues were taking a $14m-$15m hit for each day of the blockage.
  • According to Lloyd’s List, the stranded ship was holding up an estimated $9.6bn of trade along the waterway each day. That equates to $400 million an hour, or $6.7million a minute.
  • It blocked about 370 ships till the day it was dislodged!
  • Those ships had to make a decision on whether to wait -for god knows how long- for the ship to dislodge OR take the Cape of Good Hope route, across Africa, adding at least 2 more weeks to the journey and burning at least $300,000 just for the fuel!

Meanwhile,  You can move it anywhere in the world. You know, for FUN!

The Dislodgement

Six days after it got stuck, the Ever Given was successfully dislodged on 29th of March. It took about 14 tugboats and 2 dredgers for the task. The dredgers dug 18 meters down and shifted 27,000 cubic meters of sand.

Tugboats are used to park ships in ports. They use heavy cables called tow lines to push or pull the ships. Dredgers are ships equipped with machines to remove underwater sand and sediment.

Shreesha S
Shreesha S

Shreesha is a Qualified Certified Management Accountant(CMA) and Certified in Strategy and Competitive Analysis(CSCA).

Articles: 195

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