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

Suez Canal closure risk again in the spotlight
By Patrick Burnson, Executive Editor
July 23, 2013 - SCMR Editorial

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

image
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 .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Carload volumes were up 2.8 percent at 304,276, and intermodal volume for the week ending August 16 was up 5.4 percent at 270,316 containers and trailers.

Even though this data can be viewed as “old” in the sense that there is not a whole lot new to report about the port labor talks, it does a good job of looking into the mindset of shippers as talks continue.

Company officials said this service will be provided without any type of additional cost for customer shipments traveling from Ohio, Michigan, and Indiana, with expedited services available to customers outside of this area.

FTR says both spot rates and contract rates are heading up in a full capacity environment and with the fall shipping season rapidly approaching, it explained conditions for shippers could further deteriorate.

Read how others are using Business Process Management to achieve ERP success with Microsoft Dynamics AX. Download the free white paper now.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.