Suez blockage could lead to consumer and PPE shortages
The Ever Given has been stuck in the Suez Canal since Tuesday after strong winds caused the 222,000-tonne container ship to become wedged diagonally across one of the world's busiest shipping routes.
Efforts to dislodge the enormous vessel are ongoing but shipping is backed up and global supply chains of cunsumer goods and PPE gear for hospitals have been disrupted. Minds are now turning to alternative means to keep commerce afloat as resuce crews and the US Navy seek to unblock the vital shortcut.
"This is a devastating event in an already stressed market, where high demand has caused congestion delays that keep import cargo from reaching store shelves in a timely fashion," said Richard Roche, a sub-committee chairman at the National Customs Brokers & Forwarders Association of America.
The risk to container shipping is greatest in Europe - where key seaports like Antwerp in Belgium and Felixstowe in Britain are grappling with backlogs. The United States is exposed on the East and Gulf Coasts. About 45% cargo volume at the Port of New York & New Jersey moves through the Suez Canal, experts said.
US companies like Nike and Peloton recently made headlines calling out millions of dollars in shipping delay-related costs and product availability disruption. Relief checks from President Joe Biden's $1.9 trillion coronavirus stimulus package are expected to boost consumer demand and intensify such pressures.
Within days, the race to reroute cargo could be on - pitting retailers against other industries for precious cargo space.
British supply chain procurement partner OCI Limited Group Chief Executive Oliver Chapman said 134 containers of personal protective gear including gloves and masks eventually bound for organizations like England's National Health Service and New York's Northwell Health are on nine ships stuck behind the Ever Given.
He said alternative rail service from Asia into Europe is already heavily congested, and flying cargo is prohibitively expensive – increasing the cost of one small box of nitrile gloves from about 25 cents for sea to $2-$3 for air into Europe.
His group is already rerouting some US cargo to the Port of Los Angeles, which is digging out from under a mountain of cargo.
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