The Cost of Suez Canal Blockage.
                     The Cost of Suez Canal Blockage
INTRODUCTION
• The Suez Canal was blocked for six days in March 2021 after the accidental 
grounding of Ever Given, a Golden-class container ship. 
• On 23 March, the 400-metre-long vessel was buffeted by strong winds, and it 
collided with the canal bank, wedging itself across the waterway, which 
prevented other vessels from passing through that part of the Suez canal.
Source: Wikipedia
RIGOROUS EFFORTS TO REFLOAT
• The 400-metre-long container vessel, was finally freed six days after it 
completely blocked Egypt’s Suez Canal. 
• It took rigorous efforts to refloat the massive cargo ship more than double the 
size of Statue of Unity.
Source: www.indiatoday.in
SIGN OF RELIEF
• On Monday, the world breathed a sign of relief when salvage authorities finally 
managed to free the 2.20 lakh ton stranded ship, which had brought a major 
portion of the world's seaborne trade to a standstill and led to massive 
disruption in global supply chains.
Source: www.indiatoday.in
MASSIVE ECONOMIC LOSS
• While normal traffic has now resumed of the narrow Suez Canal passage, the 
ship blockage since last Tuesday resulted in massive economic loss  hundreds 
of ships ferrying cargo worth billions were either stuck in traffic or forced to 
reroute, causing significant delays in essential shipments.
Source: www.indiatoday.in
COST OF SUEZ CANAL DISRUPTION
LOSS DUE TO CANAL BLOCKAGE
• Several nations located in the eastern and western parts of the world have 
suffered a devastating economic blow due to the canal blockage. Even India 
may have faced losses to the tune of hundreds of crores due to the blockage.
Source: www.indiatoday.in
GLOBAL TRADE
• It is worth mentioning that Suez Canal is one of the world's busiest shipping 
channels for oil and refined fuels, grain and other trade linking East to West. 
• The Suez Canal blockage roughly cost 12 per cent of global trade and was 
holding up trade valued at over $9 billion per day, according to data from 
Lloyd’s list.
Source: www.indiatoday.in
ESTIMATION
• Since the Japanese-owned ship had blocked the narrow canal for six days, the 
total trade loss has been estimated at roughly $54 billion. 
• However, this figure is based on just the cargo shipments that were halted or 
delayed due to the blockage.
Source: www.indiatoday.in
PRICE OF CRUDE OIL AND GAS ROSE
• The actual economic damage suffered by countries around the world could be 
much higher as prices of important commodities like crude oil and gas rose 
amid fear that the blockage may continue for weeks.
Source: www.indiatoday.in
ADDITIONAL FACTORS
• The extent of economic loss due to the blockage is likely to be even higher 
when costs such as additional shipping operation charges, commodity prices 
and shipping delays are factored in.
Source: www.indiatoday.in