As of 23rd March, 2021, a large container ship with 20,000 TEU class, named EVER GIVEN which is owned by a company called Shoei Kisen got stuck while transiting the Suez Canal. The reasons defined to cause the ship to be deviated off the course were because of power lost amid high winds. As the result, the traffic movement through the Suez Canal was suspended until the Ever Given was refloated.
In early this Monday, with the effortlessly working day and night of the workers, the vessel successfully “rescued” to free the Suez Canal. However, even though the ship has now been floated, it appears that the afterwards consequences of the blockage might pressure to the global supply chain:
- The main impact of the incident would be the delay in the return of empty containers to Asia from Europe and The U.S.A and this effects will worsen to the current container shortage worldwide.
- All of the ports that already been strained from the Covid-related issues would be more congested as the Suez Canal reopens. A sudden traffic flow through the Suez Canal leads to a flood of hundred vessels sent here at one time.
- There are several shipping companies have made decision to reroute their vessels around the Cape of Good Hope in South Africa which could take additional 10-12 days to the journey and leading to higher fuel costs. This will certainly cause to the increase in ocean freight.
All those container vessels; therefore, cannot arrive to the destination port as original expected arrival time. As our point of view, this will result in potential domino effects for most importers, exporters and manufacturers on the world as the ocean freight will impact on the landed import price directly, along with the event that steel supply is on extremely tight. The steel industry is likely to face another “tsunami” of price rise.
If you are an importer of steel products and are having plan to purchase steel materials, we strongly advice to take quick action as fast as possible before prices move further. At MRS Steel Vietnam, we supply Galvanized Steel (GI), Galvalume Steel Coils (GL), Pre-Painted Steel (PPG) in coils and steel pipes with high-quality and competitive price. If you are concern about our products, we are always welcome your inquiries at my contact information below:
Mr. Andrew (Business Development Division)
What’s App/ Viber: +84 938 317 622