Suez Canal blocked by cargo container ship for ‘few days’
Supply chains, already under strain due to COVID-19 and container shortages, have been dealt another blow with the blocking of one of the busiest shipping routes.
The MV Ever Given, owned by Taiwan-based Evergreen Marine Corp., has been turned sideways in the narrow channel, blocking all access and unable to free itself.
Egyptian officials have deployed tugboats and diggers to try and free the 400-metre giant vessel, which is carrying 20,000 containers from Asia to Rotterdam, but said the operation would take at least two days.
On average, the Suez Canal provides the shortest route from Asia and the Middle East to the Mediterranean for 50 container ships. An estimated 100 ships are already being delayed by this blockage.
Evergreen Marine told Reuters that the ship was hit by a strong gust of wind, causing the hull to turn around and the ship to run aground. In later reports, the company said the ship had lost power.
If the Ever Given cannot be budged then options include dredging the canal or even removing containers from the giant vessel.
This is not the first time a container ship has blocked the canal. In 2017, a Japanese container ship ran aground after mechanical issues but tug boats were able to refloat the ship in just a few hours.
What is the Suez Canal?
Opened in 1869 and taking 10 years to build, the Suez Canal is a narrow waterway that connects the Mediterranean to the Red Sea, providing the shortest sea link between Asia and Europe. As an example, using the Suez Canal would reduce the distance from the Arabian peninsula to the UK by 8,900 kilometres (5,500 miles).
Traditionally the canal, in Egypt, was a crucial route for crude oil coming from the Middle East to Europe and the US, but in recent decades traffic has become more significant for goods coming from Asia, and specifically China – linking East with West.
The Suez Canal is 193.3km (120.1 miles) long and in 2015 the Egyptian government completed a major expansion to nearly double the capacity to 97 ships per day. This was achieved by expanding the Ballah Bypass from 61 metres wide to 312 metres wide for a distance of 33 kilometres – allowing ships to pass in both directions.
The Ever Given has become stuck close to the southern mouth of the canal, close to the port of Suez, so is blocking traffic in both directions.
Latest news on Suez Canal closure
The Suez Canal Authority (SCA) says it is trying to refloat the ship, and they have reopened an old section of the canal to ease the backlog – but it is unclear what size of vessel this section can accommodate.
Diggers have been spotted on the canal bank clearing sand, and the prospect of having to remove containers from the Ever Given remains a last resort.
Driver shortages: Why the industry needs to be worried
While driver shortages are a global problem, with a recent survey from the International Road Transport Union suggesting that driver shortages are expected to increase by 25% year-on-year across its 23 member countries, the issue has very much made itself felt for UK businesses in recent weeks.
A perfect storm of factors, which many within the industry have been wary of, and warning about, for months, have led to a situation wherein businesses are suddenly facing significant difficulties around transporting goods to shelves on time, as well as inflated operating costs for doing so.
What’s more, the public may also see price rises as a result due to demand outmatching supply for certain product lines, which in turn brings with it the risk of customer dissatisfaction and a hit to brand and stakeholder reputation. Given that this price inflation has been speculated to hit in October, when the extended grace period on Brexit customs checks comes to an end, the worst may be yet to come.
"Steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole"
That said, we have already been hearing reports of service interruption due to lack of driver availability, meaning that volumes aren’t being transported, or delivered, to required schedules and lead times. A real-world example of this occurred on the weekend of 4-6 June with convenience retailer Nisa, with deliveries to Nisa outlets across the UK affected by driver shortages to its logistics provider DHL.
But where has this skills shortage stemmed from?
Supply is the primary issue. Specifically, the number of available EU drivers has decreased by up to 15,000 drivers due to Brexit alone, and this has been further exacerbated by drivers returning to their home country during the COVID-19 pandemic, as well as changes to foreign exchange rates making UK a less desirable place to live and work. This, alongside the recent need to manage IR35 tax changes, has also led to significant inflation in driver and transport costs.
COVID-19 complications have also meant that there have been no HGV driver tests over the past year, meaning the expected 6,000-7,000 new drivers over the past year have not appeared. With the return of the hospitality sector we understand that this is a significant challenge with, for instance, order delivery lead times being extended.
It is little surprise, therefore, that the Road Haulage Association (RHA) earlier this month became the latest in a long line of industry spokespeople to write to the government about the driver shortage for trucks. The letter echoed the view held by much of the industry, that the cause of this issue is both multi-faceted and, at least in some aspects, long-standing.
So, many in the industry are in agreement as to the driving factors behind this crisis. But what can be done?
Simply enough, outside of businesses completely reorganising their supply chain network, external support is needed. In the short-term, the government should consider providing the industry with financial aid, and this can also be supported more widely with legislative change.
Specifically, immigration policy could be updated to place drivers on the shortage occupations list, which would go some way towards easing the burden created by foreign drivers returning to their home countries. Looking elsewhere, government should also look for ways to increase the availability of HGV driver tests after the blockage created by the coronavirus lockdowns.
Looking more long-term, steps must be taken to make a career in the industry a more attractive proposition for younger drivers, which will require a joint effort from government, industry bodies, and the sector as a whole. As it stands, multiple sources suggest that the average age of truck drivers in the UK is 48, with only one in every hundred drivers under the age of 25. We must therefore do more to increase the talent pipeline coming into the industry if we are to offset more significant skills shortages further down the line.
On the back of a turbulent year for the supply chain industry, it has become increasingly clear that the long-foretold shortage of drivers is now having a tangible and, in places, crippling effect on supply chains.
Drivers, and the wider supply chain industry, have rightly been recognised for the seismic role they played in keeping the nation moving and fed over the past year under unprecedented strain. If this level of service is to continue, we must now see Government answer calls to provide the support the sector needs, and work hand-in-hand with the industry to find a solution. If we do not see concrete action to this effect soon, we are likely to be in for a turbulent few months.
Rob Wright is executive director at SCALA, a leading provider of management services for the supply chain and logistics sector