The ripple effects from the Ever Given—the containership that was stuck in the Suez Canal a few weeks ago—will continue to be felt in trade lanes around the world for a month or two. We were already taxing the global transport system beyond its limitations when the grounding in the Suez Canal occurred. The delay of some 400 vessels—many of which were containerships—contributed to the disruption of some 1.5 million containers, leading to the worst possible scenario for an already overburdened system. Docking schedules for ships were missed as some went around The Cape of Good Hope on longer voyages, only to result in vessel bunching with other ships that waited, or turned around to go through the canal when it opened.

The result cancelled sailings, and lack of equipment conversion from import to export is now creating real problems in Europe/USA/Asia lanes. These involuntary void sailings have removed as much as 30% capacity from some lanes, while the equipment shortage has had a similar effect on many other lanes.

Impact on Imports and Exports

The lack of available sailings impacts import and export lanes alike. As ships sit outside of port at anchor, awaiting to swap out import loads for export, the schedule slips, as does empty container availability. As vessels bunch up, terminals become overrun, and efficiency for gate moves drops dramatically. The truckers are forced to wait four, six, and eight hours at times just to retrieve a single container, where they might have moved two or three in that time without congestion. This uses up driver’s hours and reduces delivery capacity proportionately, adding further stress to the system.

Ocean carriers tell us their reduced capacity is already full for the month of May, and extremely tight even into June as the industry tries to dig out of this mess. High demand continues to cripple the efforts however, that could push this overbooked scenario into third quarter if it persists. Premium rates paid to carriers are not a guarantee to get on a specific sailing but help secure a better place in the cue. Booking as early as possible is the best way to vie for a spot in this very competitive market. In this kind of market, where real capacity in involuntarily removed from the market, everyone will feel the pinch for a couple of months until vessels get back on schedule and container flow returns to normal.

If you have questions on how this may impact your shipments, please reach out to your Mohawk Global representative.

Rich Roche