All Categories


You are here : Home>News

Why does the blockage of the Suez Canal make the world economy so painful?

TIME : 2021-03-30 HITS : 87

The super-large container ship Ever Given has been blocking the Suez Canal in Egypt , and the 400-meter-long ship with a displacement of 200,000 tons lost its maneuverability in strong winds and sandy dust. It was 23 local time. The Japanese "stuck" in the Suez Canal in Egypt, causing serious blockage of the river. There are long queues of freighters on the waterway, and a large number of ships are waiting to pass.



On the 29th, the heavy freighter that had been stranded in the Suez Canal for nearly a week finally got out of the water. The main arteryof the worlds important waterway has also resumed navigation. Able to pass the canal and try to solve the congestion problem within 4 days


"Ships, containers, and cargo are all in the wrong place!" In recent days, practitioners in every link of the global supply chain have expressed similar sighs. As one of the most important shipping channels in the world, the blockage of the Suez Canal has made the global supply chain "stuck in the throat".


Why does the blockage of the Suez Canal make the world economy so painful?

1. global trade Losses may reach 10 billion U.S. dollars per week


Some experts said that the blockage of the Suez Canal has made global trade that has been severely hit by the epidemic "exacerbated".


The Suez Canal is located at the key point of the intercontinental zone of Europe, Asia and Africa, connecting the Red Sea and the Mediterranean Sea. Data show that in global maritime logistics, about 15% of cargo ships pass through the Suez Canal. Lars Jensen, CEO of the Danish "Maritime Intelligence" consulting company, said that about 30 heavy cargo ships pass through the Suez Canal every day, and one day of blockage means that 55,000 containers are delayed in delivery. The German insurance giant Allianz Group estimates that the blockage of the Suez Canal could cost global trade between US$6 billion and US$10 billion a week.


2. The pain of the retail industry-


Due to the high dependence on the Suez Canal shipping channel, the European market has clearly felt the inconvenience caused by the blocked logistics. Many European home furnishings and home appliance retailers have stated that there are goods blocked in the canal, which will cause delays in delivery. Once the situation is not alleviated for a long time, it may cause prices to rise.


3. The pain of manufacturing-


Not only is the retail industry "pain", but the manufacturing industry is also the same. The international rating agency Moody's analyzed that because the European manufacturing industry, especially auto parts suppliers, has been pursuing "just-in-time inventory management" to maximize capital efficiency and will not stock up large amounts of raw materials. In this case, once logistics is blocked, production may be interrupted.


4. The pain of the maritime industry——


Not only that, if the congestion continues and a large number of cargo ships cannot turn around, it will inevitably lead to increased shipping rates, increase the cost of global trade, and cause a chain reaction. Since the second half of last year, the international shipping market has been affected by factors such as container shortages and trade recovery. The shipping capacity has already been very tight, and the shipping price has been at a high level. Blocking the Suez Canal is tantamount to "sprinkling salt on the wound" of the shipping market.


5. The pain of the insurance industry——


At the same time, transportation delays will also generate a large number of insurance claims, which will put pressure on financial institutions engaged in marine insurance, or will trigger turbulence in areas such as reinsurance.


6. The pain of oil prices


There are also market participants worried that the prices of international crude oil and other commodities will skyrocket due to the blockage of the Suez Canal. In recent days, international oil prices have risen significantly. The prices of light crude oil futures delivered in May on the New York Mercantile Exchange and London Brent crude oil futures delivered in May have both exceeded $60 per barrel.


Countless businesses are affected

The foreign trade usually use sea , air transpotation way to delibery the cargo.Under this situation, It will give more inconvenience and damage for many factory which need exported.If the situation at the Suez Canal continues, some firms will have to pay to order more goods and have them sent over by air freight, which costs at least three times more.

Ningbo Joiwo Explsoionproof hope everything will goes well .

Joiwo Explosionproof, a professional telecom-based company with over 15 years of experience spearheading the industrial telephone and system, announced the release of an explosion/weatherproof proof industrial telephone providing safe and reliable communication for indoor and outdoor hazardous locations. These years,a great number of new products which taste market are developed,driven us strong competition comparing with other company.


----- Written by Joy 


Ningbo Joiwo Explosionproof Science&technology Co., Ltd

Add: No. 21 Middle Road Guoxiang Bridge Lanjiang Street Yuyao Zhejiang 315400

Tel: +86-574-58223617  Wechat/Cell: +8613858200389

Email: sales02@joiwo.com

industrial telephone, port,dockexplosionproof junction box,speaker,fiber telephone,mining telephone,call center,bank phone,auto dial telephone, Emergency push to call intercom system,analog telephone,patient telephone,Intercom system,GSM telephone,PBX,jail phone ,tunnel,marine, VOIP -SIP-IP telephone ,frequency,weatherproof telephone, explosion proof telephone , vandal proof phone hands free telephone ,power plants,prison telephone,outdoor

Hot categories

SIGN UP AND SAVE !Exclusive email offers & Limited time discount specials