Friday, March 29, 2024

Blocked canal’s impact unknown until vessel’s moved

Neal Wallace
Meat exporters fear already difficult shipping problems could quickly escalate if the clearance of a container ship blocking the Suez Canal is prolonged.
Reading Time: 2 minutes

Meat Industry Association (MIA) chief executive Sirma Karapeeva says her members are closely monitoring the situation, aware that the impact could quickly escalate the longer it takes to clear the Ever Given which is blocking the key trade route.

“It will almost certainly have a knock on effect and mean delays and disruptions to schedules,” Karapeeva said.

“However, how much will depend on how quickly they can refloat the ship.”

“If the situation lasts longer, our processing and exporting companies will be extremely concerned and the impact could be significant.”

Alliance Group chief executive David Surveyor says the blockage worsens already disrupted trade logistics due to covid-19 and occurs just as primary sector exports are reaching their peak.

“The problems are widespread with bottlenecks across every single link of the supply chain,” Surveyor says.

“Container availability, vessel schedule, warehouses and transit times are all impacted and port congestion remains a problem.

The impact from the Ever Given worsens the situation.

“Global logistics suppliers are unclear on when the situation will improve, but it does not look likely in the near term,” he says.

Surveyor says Alliance is successfully shipping product – he describes refrigeration and cool store capacity as satisfactory, and with processing demand for beef at peak levels for the next two months, additional capacity has been freed up at its beef plants.

A Zespri spokesperson says it does not use services that go through the canal.

The BBC reports that an estimated 12% of global trade passes through the canal, a short cut between the Mediterranean and Red seas.

It estimates more than 300 vessels are now backed up on either side of the blockage and that other ships are now taking the longer route around Africa, adding an extra two weeks to voyages.

The 193km canal was built between 1859 and 1869 and originally handled 49 ships a day.

It was widened by the Egyptian Government in 2014, which took capacity to 97 ships a day.

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