Air Freight May See Boost Due to Suez Canal Blockage
The last few days saw a sudden disruption in the global supply chain, as a container ship, the Ever Given, ran aground in the middle of the Suez Canal. Experts are not certain of how this happened, although many point to high wind speeds and an ever increasing size of container ships over the last decade.
This blockage has caused hundreds of ships to que up on both ends of the canal, waiting for a resolution to this blockage, to be able to pass through and continue on with their route.
Air, sea-air and rail freight demand is expected to rise significantly on Asia-Europe lanes as shippers try to avoid the chaos from the blocking of the Suez Canal. Even if the vessel was salvaged today there would be consequences and impact – air and sea-air will become more prevalent. The industry is expecting air – which traditionally thrives on chaos in supply chains – to take the brunt of the demand.
Airlines however, were cautious over predicting greater demand. A spokesperson for Lufthansa Cargo said: “At the moment there are no side effects showing that freight will be shipped by air instead of sea. That might happen if the situation remains critical for the next weeks.”
A spokesperson for a Japanese airline also said it had yet to see any direct impact, but the number of inquiries was rising.
“If parts or materials supposed to be arriving in Europe are delayed, then production lines will be delayed. In that case, I would expect shippers to try to source material from elsewhere in the world, so we may see air cargo demand into Europe.”
Airlines are currently busy, transporting Covid-19 testing kits into Europe, as well as handling a booming e-commerce market; capacity is certainly an issue.
Attempts to re-float the Ever Given will continue over the coming days, but several experts have suggested the ship could clog the canal for some time.
Shipping lines have started to re-route vessels around the Cape of Good Hope, a journey which adds an extra week for ships coming directly from Asia, but two weeks for ships re-routing from the canal.