How much is the epic traffic jam in the Suez Canal costing the world? The short answer: a lot.
It’s going to be tough to come up with a single figure that covers everything, and much will depend on how long the massive cargo ship remains stuck in the waterway. But here’s what’s already skyrocketed in price since the Ever Given ran aground Tuesday, blocking $10 billion of oil and goods that sail through the passage on a typical day.
- The charterer of a very-large crude carrier is racking up charges of between $30,000 to $80,000 a day to park the tanker off Suez waiting for the canal to open, according to data published by Fearnleys, a shipbroker.
- The cost to ship a 40-foot container from China to Europe has climbed to about $8,000, almost quadruple the figure a year ago.
- Earnings for very large crude carriers, or VLCCs, hauling oil from the Middle East to China rose to $1,371 a day, registering a profit for only the second day in more than seven weeks. And that route isn’t even affected by the logjam in the Suez Canal.
- Suezmax vessels, which typically carry 1 million barrels of oil, are now getting about $17,000 a day, the most since June 2020.
- Caterpillar Inc., the U.S.’s largest machinery producer and one of the biggest in the world, is facing shipment delays due to the Suez Canal blockage and is even considering airlifting products if necessary.
The Suez Canal blockage is forcing the shipping industry to incur heavy costs for rerouting shipments of good and commodities, including oil and LNG.
With the canal potentially out of commission for weeks, shippers are now weighing the cost of rerouting their vessels around Africa. It’s not an easy decision. Sailing around the Cape of Good Hope adds 6,000 miles (9,650 kilometers) to the journey, and fuel costs alone would be about $300,000 for a supertanker delivering Middle East oil to Europe.
— With assistance by Robert Tuttle -bloomberg