Suez to Jam Ports for Month or More, Chinese Supplier Says

(Bloomberg) --

While some progress was made Monday to free an enormous container vessel blocking the Suez Canal, a Chinese logistics executive warned that the impact on global trade could linger as backlogs in Europe will worsen.

Ports are already struggling to handle normal shipping volumes because of the coronavirus pandemic, and now they’ll need to cope with many delayed vessels all arriving at once or in quick succession, said Max Wei, General Manager of international business at Speedaf Logistics Ltd. Even under the best-case scenario, it will take a month of more to work through the congestion, he said.

“It’s problematic -- ports in Europe were already under pressure due to Covid,” said Wei, whose company specializes in the transport of goods between Africa, Europe and Asia. “Now you give them three-to-four times supply volume in one go, plus the epidemic situation in Europe is not improving.”

The Suez Canal, which has been blocked since Tuesday, is a conduit for about 12% of global trade. Some 450 vessels are stuck, waiting or headed to the waterway. Others have decided to detour around Africa while work continues to free the Ever Given, which was partially refloated Monday. It could take a week to get the ships out of the canal corridor, an Egyptian official said.

Speedaf has Chinese-made goods including consumer electronics and household items stuck en route to Europe. Wei said the company has suggested clients look at air and rail alternatives if their products need to be delivered urgently.

Grace Zhou, a cross-border logistics manager for an ecommerce company in the Chinese city of Yiwu, has used air to deliver some products to Europe and is planning other channels including trucks and railway to spread risk.

Zhou said her company’s products include swimsuits sold on Amazon.com Inc. and eBay Inc., which are in high demand now as the summer season approaches in Europe. Just a few weeks’ delay could result in missing out on the peak period, she said. Air-freight rates are also eating into margins.

“We are still very worried,” Zhou said. “We have no clue and no control when the situation can get back to normal. We are facing big uncertainties.”

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