The stuck boat: the fragility of global systems exposed.
(By Pierre Markuse from Wikimedia Commons)
By Wisley Lau
There are times in life when you feel as though you’re stuck, thinking you will never pull out of a messy situation. The 220 thousand ton Ever Given cargo boat shared those exact sentiments during late March of 2021.
This is the story of the most influential traffic jam the world has ever seen, and how this accident provides insights to globalization.
Part 1: The Story
The Suez Canal is located in Egypt and functions as an artificial sea-way, connecting the Mediterranean Sea and the Red Sea. It is crucial to the shipping industry because it acts as the connector between the Atlantic Ocean and the western Pacific Ocean. This means goods and products can be shipped between Europe and countries in Asia, Africa, and Oceania.
On March 23, the Suez Canal began its day like any other: with ships moving along its canal pathways. One of the ships, the Ever Given, passed through the canal while shipping products from Malaysia to the Netherlands. The ship was huge and one of the largest cargo ships in service — nearly 400 meters in length and 33 meters in height.
Suddenly, the boat encountered strong winds, which blew the ship off course. The Ever Given was now stuck on the Canal’s banks.
Immediately, over a hundred ships get stuck in the massive traffic jam, causing a blow to the shipping industry.
Not only was the shipping industry impacted by the ongoing pandemic, but because the Suez Canal is responsible for 10% of the global shipping industry, the incident created a chokepoint that could cause massive repercussions.
Authorities in Egypt, with the help of the United States and other countries, spent days trying to pull the ship off shore with multiple failed attempts. However, the final recipe for success required tugboats, dredger pumps, and a lot of diggers to excavate. The dredger pumps were used to remove sediment beneath the ship in the Canal so it could move more freely. The diggers dug soil off the banks of the Suez Canal to free the tips of the boat, while the tugboats tried to push the boats in the correct direction.
After six days of grueling work, the Ever Given was finally released from “captivity” on March 30 and into the ocean. Not long after, the Egyptian authorities seized the boat with a pending fine of nearly a billion dollars. Meanwhile, roughly 400 boats had finally left the traffic jam, and moved one by one out of the canal.
Part 2: The Lesson
Despite the ship only being stuck for six days, it already created massive impacts on the global economy. For example, the price of oil jumped 5% since the Suez Canal ships over a million barrels of oil and 8% of the world’s natural gas every day. The blockage, in its entirety, held up 9.6 billion dollars worth of goods per day.
Not only was the oil industry affected, but many other businesses, like manufacturing industries, ship materials from countries such as China. Retailers and groceries with imported foods were also affected. Many other businesses may be negatively impacted, and economists say we will need time to calculate the total amount of losses post-stuckage.
This event also gives us a glimpse into the fragility of global supply chains. Global supply chains are the method of distributing services and goods through a trans-national network. For example, a doll can have its plastic material made in China, shipped to India for production, moving to Germany for packaging, then moved to the United States to be sold for profit. The benefits of global supply chains for large companies means their products will be made at cheaper prices and allow them to earn larger profits.
However, in this instance, the demand of global supply chains caused the economic downfall of the Suez Canal traffic jam. With on-demand shipping being a key factor in the logistics industry, jammed systems make the consequences more significant. During the first wave of coronavirus, we saw how countries all over the world were underprepared. Just like the Suez Canal traffic jam, this could have been prevented if preventative action had been taken.
Not only do we see an over-reliance in global supply chains becoming a problem after the Ever Given incident, but there is also more evidence relating to the fragility of globalism. From the coronavirus pandemic last year, we saw that a tiny glitch in the massive machine of globalization can cause the system to malfunction, if not shut down. There is only one option when it comes to resolving the issue that has plagued global logistics and systems related to the Suez Canal accident: if we can create backup plans or better response systems, the impacts of accidents like what we have seen in the Suez Canal can be lessened, if not prevented altogether.
To summarise, the “entire-boat-got-stuck-in-the-water-pathway” incident not only showed us how reliant we are upon others, but how globalization is as fragile as an error on a boat.