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The impact of the blockage of the Suez Canal on international trade

The impact of the blockage of the Suez Canal on international trade

Issue Time:2021-04-06
The Suez Canal
is the greatest route in the East. The Suez Canal is the shortest route connecting Asia and Europe. It connects the Red Sea and the Mediterranean Sea, connects the Atlantic Ocean with the Indian Ocean and the Pacific Ocean via the Mediterranean Sea and the Suez Canal, and is an international sailing route that plays an important role in the global economy and the world.

What happened to the Suez Canal?

The greatest Suez Canal

Maybe you have heard about the news that the Suez Canal was completely blocked by a huge giant container vessel, which is 400 maters long, carrying more than 20000 containers since 24th March. 

Let's take a look at some pictures.

the blockage of the Suez Canal
Ocean freight increase
price of plastic raw material increase


What effect has the blockage of the Suez Canal had on international trade?

But maybe you don't know this blockage already triggered the speculation in crude oil market 5% price increasing overnight. Its biggest one-day gain in nearly a year to close at $64.41 per barrel. Many ships have to shift to entirely new routes, sailing around the Cape of Good Hope ,the southern tip of Africa. And such delays could be more than 15 days.The Suiz Canal is vital international trade passageway, for around 12% of whole world's seaborne trade. 

There are around 100 cargo vessels and 15 oil tankers, are waiting there. The shipping delay could compact everything including cloth, shoes, gym equipment whatever you order on line. That means the raw material, the gas, the oil price could get higher too. The freight rates are set to jump even higher. A more prolonged closure of Suiz canal will defiantly set the shipping company, the container company as the biggest beneficiary. And meanwhile the oil tanker, the dry bulk, and the air cargo, could also see more higher rates. The price will increase soon. 

When will the ocean freight be reduced?