Suez Canal: Shipping rates surge with blockage likely to remain for weeks

Suez Canal: Shipping rates surge with blockage likely to remain for weeks

Suez Canal: Shipping rates surge with blockage likely to remain for weeks

Shipping rates for oil product tankers have nearly doubled this week due to the ongoing Suez Canal blockage, and several vessels were diverted away from the vital waterway as a giant container ship remained wedged between both banks.

A huge container ship blocking the Suez Canal like a "beached whale" may take weeks to free, the salvage company said, as officials stopped all ships entering the channel on Thursday (March 25) in a new setback for global trade. It was originally expected that it may only take a couple of days to dislodge it.

While it is unclear what the impact on perishables trade is, it is likely that some of Europe's fresh produce imports will be affected, such as table grapes from India and other fruits from Asian countries.

Work to dislodge the massive Ever Given container vessel blocking the Suez Canal will take until at least Wednesday next week, Straits Times reported, according to people familiar with the rescue efforts.

Dredgers will need to move between 15,000 to 20,000 cubic meters of sand in order to reach a depth of 12 to 16 meters - eight times the size of an Olympic swimming pool - to allow the ship to float, the Suez Canal Authority said on Thursday. 

"In addition to the dredgers already on site a specialized suction dredger is now with the vessel and will shortly begin work. This dredger can shift 2,000 cubic meters of material every hour," Bernhard Schulte Shipmanagement, the technical manager of the Ever Given said in a statement.

On Thursday, 238 vessels were queued up, up from 186 Wednesday, according to Bloomberg data. Ever Given has not moved and operations to re-float were still ongoing earlier in the afternoon, according to Inchcape Shipping Services.

Shipping rates are already skyrocketing, with the cost to ship a 40-foot container from China to Europe having climbed to about US$8,000 (S$10,870), almost quadruple the figure a year ago. Suezmax vessels, which typically carry 1 million barrels of oil, are now getting about US$17,000 a day, the most since June 2020.

Two liquefied natural gas tankers loaded in the US and bound for Asian markets appear to have changed course in the mid-Atlantic and are now heading around Africa to avoid gridlock in the Suez waterway.