Just like the coronavirus (COVID-19) pandemic, the Suez Canal incident — in which the container ship Ever Given blocked the canal for nearly a week, holding up billions of dollars in trade goods — emphasizes how globally interconnected supply chains are.

“(It provided) the business world with another example of the true impact that the disruption of a single link can make on an entire chain of supplies,” says Brian Alster, general manager, third-party risk and compliance at Dun & Bradstreet, a Short Hills, New Jersey-based business data and analytics provider. Over time, companies have developed a higher level of dependency on suppliers and third parties from other countries, he says: “(T)hat dependency is highlighted when a single shipping artery that is a major channel for the transportation of goods between the East and the West is impacted and disrupts the entire world’s supply chain.”

The 1,312-foot-long ship, which was carrying around 1,800 containers, was freed on March 29 after getting stuck on March 23. More than 300 ships awaited passage, while many others opted to sail the longer, more time-consuming route around the Cape of Good Hope. According to reports, about 12 percent of seaborne trade passes through the Suez Canal, and during the blockage, as much as US$10 billion in cargo — like toilet paper, oil, vehicles, furniture and electronics — was delayed.

“Whether you’re a retailer waiting on finished goods or a manufacturer waiting on work in progress, this will negatively impact your supply chain,” says Alex Wakefield, CEO of Longbow Advantage, a Montreal-based supply chain consulting and technology company. It puts more stress on already stressed supply chains, he says.

Beyond-Regional Impact

There’s a perception that the Ever Given blockage principally affects Asian-European trade, says Pawan Joshi, executive vice president, products and strategy at E2open, an Austin, Texas-based provider of cloud-based supply chain software. However, he notes, “The Suez is a main shipping lane for countries such as India, that exports to America. Roughly 20 percent of containers shipped through the Suez are destined or originating to and from America.”

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