Supply Chain Managers May Have to Plan For Trouble in the Suez

Suez Canal closure risk again in the spotlight

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Recent political unrest in Egypt has again raised the specter of the Suez Canal closing. However, if it were to be suddenly shut down tomorrow, it would not be catastrophic for the container industry.

According to analysts for Drewry Maritime Research, vessel schedules could be immediately adjusted to minimize delays.

The low probability of the Suez Canal closing has increased due to the threat of terrorist activity from either the ousted Muslim Brotherhood party or one of its rivals for power, concede analysts.

Still, there are still more than enough container ships to cope with the extra distance of sailing between Asia and Europe around the Cape of Good Hope, with transit times remaining little longer due to their reserves of speed.

As calculated in last spring, average container vessel speed only has to be increased to 22 knots in each direction to avoid the loss of time, still leaving a safety margin against a top speed of between 24 and 25 knots.

The Suez canal is a key component in Asia-Europe container trade, and is becoming more important for Asia-US East Coast trade, too. If it were to be suddenly closed tomorrow, supply chain managers would have to factor in a hefty surcharge to cover the cost of deviating around the Cape of Good Hope.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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