A new study reveals that Maersk Line lost nearly $89 million due to the 2021 Suez Canal blockage caused by the Ever Given, using a methodology that could also analyze the ongoing maritime crisis in the Red Sea.
The study, conducted by a European research team in collaboration with the School of Business, Economics and Law at the University of Gothenburg, highlights that around four-fifths of international trade is carried by sea, and on an average day around 50 container ships pass through the Suez Canal. By analysing ship data, the research team developed a model to calculate the economic and environmental consequences of disruptions in maritime logistics.
The blockage highlights the vulnerability of our global supply chains and the huge costs that can result from a disruption. Our findings underline the need for robust contingency plans and alternative transport routes to minimise future risks, … said Prof. Kevin Cullinane (The School of Business, Economics and Law at the University of Gothenburg).
Rebeca Grynspan, Secretary-General of UNCTAD, had explained that a key feature of maritime transport is its reliance on chokepoints, which are strategic, narrow maritime passages like the Suez Canal and the Panama Canal. These critical waterways offer shortcuts on lengthy intercontinental maritime journeys, reducing both time and costs. However, she noted that the essential role of these chokepoints makes them especially vulnerable to disruptions—whether climatic, economic, geopolitical, or operational—which can result in severe consequences for global shipping.
The study’s results are based on data from Maersk’s fleet, which accounts for one-third of all commercial ships affected by the blockage. A total of 69 of the company’s ships were impacted, either through rerouting via the Cape of Good Hope or because of delays at the Suez Canal.
The research shows not only the significant economic risks in international logistics, but also the substantial impact that disruptions have on day-to-day operations, … commented Prof. Hercules Haralambides (Dalian Maritime University, Erasmus University Rotterdam, Sorbonne Centre for Economics).
Of Maersk’s total loss of $89 million, the cost of holding container inventories was the largest expense at $76 million. Ship costs and environmental costs accounted for the remainder.
Increased carbon emissions
Ship costs are calculated by summing the daily capital, operational, container, and fuel costs during the period of the blockade. Environmental costs are calculated by multiplying the amount of additional carbon dioxide emissions by $100 per tonne of CO2, which is the European Commission’s standard external cost for the transport sector.
The blockage increased the carbon dioxide emissions of Maersk’s fleet by 44,574 tonnes due to longer voyages and waiting times. In addition, the Suez Canal Authority lost $5.9 million as a result of the ships’ detours.
Due to confidentiality, the researchers did not have access to data from all container ships affected by the blockage.
Analysis method for other crises
The study’s methodology can be applied to other logistical disruptions, such as those currently occurring in the Red Sea due to attacks on cargo ships by Houthi rebels. Many ships are now being rerouted around the Cape of Good Hope, and shipping companies are being forced to change their usual route via the Suez Canal.
Given the large number of ships being rerouted over an extended period of time, the consequences are much greater now, both in terms of inventory holding costs and carbon dioxide emissions. Researchers can use our framework to analyse the additional costs of this major disruption to global maritime trade, … noted Prof. Theo Notteboom (University of Antwerp, Ghent University, Antwerp Maritime Academy).
Source: Safety4Sea
