Ever Given Crisis Shows Why Maritime Visibility Is Vital To Supply Chains

  2021 03 31 Suez BL 1

The impact of the Suez Canal blockage from the grounding of the container ship Ever Given demonstrates the need for advanced maritime visibility and intelligence to manage supply chain disruptions. The megafreighter Ever Given ran aground for six days during March in the Suez Canal, a passageway for some 30 percent of world’s shipping container volume and 12 percent of global trade. The grounding resulted in both a huge backlog of ships waiting to go through the canal and the diversion of a number of ships around Africa, a detour that could add about 10 days to the journey from Asia to Europe.

Suez Canal Backlog Jeopardizes Supply Chains

The backlog of vessels delayed in going through the canal is expected to throw off ship arrivals at ports in both Europe and the United States. Disrupted sailing schedules means a surge in ocean vessel arrivals, adding to port congestion and increasing container dwell times. All these delays in unloading cargo to free up containers for reuse could only worsen the ocean box shortage that started in the end of 2020.

With port congestion already a major issue for the West Coast of the United States, it’s possible that we could start to see similar problems on the East Coast. US supply chains impacted by the Ever Given disaster include those for department, grocery and hardware stores along with medical equipment, plumbing, heating, and semi-conductor suppliers.

For Europe, more than 200,000 tons of cargo from Asia will be late in arrival. Europe’s major ports, which so far have escaped the congestion plaguing US ports, could find their dwell times increase as well. Impacted European supply chains include those for vehicle parts, garments, electrical and photosensitive materials as well as plastics and pharmaceutical goods.

Squeezing Megafreighters Through Canals

Unfortunately, blockages like what happened in the Suez Canal could become more common. That’s because the Ever Given is one of the first megafreighters, ships built to carry more than 20,000 twenty-foot equivalent units (TEUs.) Right now, there are more than 100 megafreighters in use on the seas or under construction. Reportedly, the Ever Given itself was too bulky to make its way through the Panama Canal. The prospect of this new class of large capacity containerships getting stuck in canal passageways is a more likely occurrence.

How Supply Chain Managers Can Avoid Future Canal Blockages

What are supply chain executives to do to avoid future problems? They can give consideration to near-shoring or re-shoring, sourcing from suppliers closer to their target customer markets. For example, instead of buying from a supplier in China, a US company could purchase parts or products from one in Mexico or a German company could source from Eastern Europe rather than Asia.

But for many companies local or regional sourcing is not an option. For reasons such as labor or material costs, or supplier infrastructure, they have to bring in goods from faraway places. For these companies, ocean transit visibility and maritime intelligence is essential for managing supply chain flow.

By having real-time visibility over maritime movements, a supply chain manager could see what’s happening to an ocean vessel in transit. With real-time alerts on major developments, such as the Ever Given’s grounding, the manager could take a corrective action such as reassigning inventory throughout the network to work around the shipment delay. With the help of analytics, the manager would be better positioned to make fact-based decisions on freight still at origin, expediting freight or selecting future bookings that will yield the best possible sailing service and avoid the worst of current ocean shipping hazards. 

The combination of project44/​Ocean Insights Gives Enhanced Maritime Visibility

With the recent acquisition of Ocean Insights, project44 can now deliver enhanced ocean freight visibility, maritime market intelligence, and carrier and port performance analytics to give ocean shippers the ability to deal with crises like the grounding of the Ever Given in the Suez Canal. That way the next time a megafreighter gets stuck in a major passageway, the supply chain can have an agile response to an ocean shipping crisis.