The blockage of the Suez Canal obstructs the daily transit of goods worth approximately 8 billion euros. This is the reason that is generating great concern worldwide, due to a grounding of the Ever Given cargo ship, belonging to the Evergreen company, which caused the blockage of the waterway linking the Mediterranean Sea and the Red Sea.
Attempts to undo the Ever Given, which has been blocking the Suez Canal since Tuesday, have been unsuccessful. The authorities of the waterway that signifies one of the world's main commercial arteries tried to float the ship using tugboats. But the operation, given the weight and size of the super-ship (the size of four football stadiums), will require more extensive work.
Royal Boskalis Westminster, the company commissioned by the owners of the Ever Given to rescue the ship, has only been able to say that "several days or even weeks" will be needed to free the channel through which containers worth 9.5 billion dollars (just over 8 billion euros) pass every day, according to the calculations of the Lloyd's List Intelligence consultancy, quoted by the newspaper El País.
In the meantime, and given the dire economic consequences of blocking the transit of goods for a long period of time, some shipping companies are considering alternative routes, specifically the one around Africa via the Cape of Good Hope. However, this route, which would avoid the collapse of the Suez Canal, would add at least 10 days to shipping, according to the International Chamber of Shipping (ICS).
Russia, for its part, raises the option of the Arctic Route, an alternative that, it argues, will be faster, cheaper, safer and more environmentally friendly for the transport of goods, but which has yet to prove its reliability. "The Suez precedent demonstrates the fragility of any route between Europe and Asia. In this situation, the Northern Sea Route, whose competitiveness is growing year by year, is growing in importance," Vladimir Panov, Arctic specialist at Russia's nuclear agency Rosatom, told reporters.
The Arctic Route was launched in 2011 by Russian President Vladimir Putin, but it is a forward-looking project, as the Kremlin does not expect it to function as a fully-fledged international corridor until 2035. In fact, in 2020, ships with 1.17 billion tonnes on board crossed the Suez Canal, while almost 33 million tonnes travelled the northern route last year.
Shipping lines are taking alternative routes in the face of the blockage in the Suez Canal, while 248 vessels are stuck together, with the very real possibility that the blockade could last for weeks; some shipping lines have already begun to divert their ships via the route around Africa, despite the fact that it is longer and more complicated.
The bottleneck in the Suez Canal is causing problems for the major shipping lines. And these, faced with uncertainty, are already moving and changing the routes of their ships.
The dilemma for the companies at the moment revolves around how long they estimate that the Ever Given will remain stranded in the Suez Canal, blocking traffic in both directions. If companies are confident that the operation will be resolved quickly, a scenario that seems increasingly remote, then they may decide to wait. If, on the other hand, they think the situation will take too long, then they may opt to round the Cape of Good Hope, a journey that takes about 10 days longer than crossing the Suez Canal.
While the option of diversifying itineraries is being explored, Russia predicts that countries such as China, Japan and South Korea will take into account the precedent of the Ever Given container ship in their future planning. "China is interested, but so is the United States. It is logical that after what happened we wonder what would happen if there were an alternative route," Sergei Valentei, professor of economics at Moscow's Plekhanov University, told Efe news agency.
However, he rules out the possibility that the Arctic Route could replace the canal. "The aspiration is that some countries will find it profitable to transport their goods through the north instead of Suez," he said. "There is progress, but the project has proved to be more complex than imagined. We need more time and a lot of investment. It can't just be a transport hub. We also need to develop the Arctic territory, which is difficult because of the adverse climatic conditions and the lack of population," he said.
According to Moscow, the Arctic Route is also safer, as there is no threat from pirates in the waters off the Horn of Africa. In addition, Putin has ordered the creation of a network of military bases along the entire route to defend national interests and ensure the security of cargo transport against possible terrorist attacks.
Global equity indices and crude oil prices rose on Friday, while safe-haven assets such as the dollar and US Treasuries fell as expectations of a global economic recovery overshadowed a picture marked by the blockade of the vital Suez Canal shipping lane.
It could be weeks before the stranded vessel is freed, although analysts said seasonally low demand for oil could mitigate the impact of the logjam.
Local authorities are struggling to undock the 400-metre-long ship and are witnessing an extensive line of ships wanting to use the passage connecting Asia and Europe. With an eye on logistical difficulties, oil futures contracts rose again on Friday.
May WTI crude oil futures rose 4.12 per cent to $60.97 a barrel, while Brent May crude rose 4.26 per cent to $64.43 a barrel. The index had already strengthened on Tuesday on news of the blockade in Suez, but the last day saw a sharp negative correction on concerns about the pandemic's progress.