Suez traffic jam raises issue of whether bigger is better
● The maritime world went into overdrive this week to dislodge one of the world’s biggest ships after it got jammed in the Suez Canal, laying bare the challenges the industry must navigate as mammoth vessels play an ever larger role in global trade.
The container ship Ever Given, which got stuck across the canal on Tuesday, can haul more than 20,100 steel boxes, making it one of the largest container ships, according to Jayendu Krishna, director of maritime advisers at the consultancy Drewry. Such vessels can be longer than the height of the Eiffel Tower and bigger than three soccer fields.
Around the world, ships have ballooned in size because the industry has looked for economies of scale, but these mega vessels have also drawn concerns. Shipping companies have used them to cut costs per unit, but that’s putting pressure on ports to make their waterways deeper and spend on more cranes, said Park Moo-hyun, a Seoul-based analyst at Hana Financial Investment.
The Ever Given “was grounded accidentally after deviating from its course due to suspected sudden strong wind”, said Taiwan-based Evergreen Line, the time charterer of the vessel.
The Suez Canal has had to contend with everlarger container vessels, with the average ship size reaching 119,000 tons in the 12 months to February 28, against 93,500t in 2015, S&P Global noted this week.
Globally, there are about 180 vessels that can carry more than 15,000 containers, according to Um Kyung-a, an analyst at Shinyoung Securities in Seoul. The industry’s appetite for these big ships was sparked when Maersk took delivery of Emma Maersk, which could carry 15,000 containers, in 2006. Since then, shipping companies have been competing to build bigger ships.
At least 47 more ultra-large container vessels are expected to be delivered by 2024, according to Drewry. A vessel that can carry 20,000 containers costs about $144m (about R2.15bn) and those carrying 23,000 cost more than $150m, Drewry estimates. The container shipping industry has been straining at full capacity for the past six months, trying to deliver goods as consumers, restricted from travelling, spend more on household goods instead.
More than 300 vessels are caught up in the traffic snarl in both directions in the canal, a global trade artery. Oil refiners across the world use the route heavily, raising worries that global energy markets could be affected by the blockage.
“The Ever Given incident has raised the need to relook at some of the contingency plans these canals have to prevent this from happening again,” said Um.
“A lot of large vessels do go through the Suez Canal every day but when one gets into trouble like what’s happened now, the impact is just too big.”
‘When one gets into trouble ... the impact is just too big’