A cargo ship is stuck in the Suez Canal.The ship left on March 4 and arrived at the Suez Canal in Egypt on March 22. It was due to arrive in Rotterdam in the Netherlands on March 31. At around 8 am Egyptian time on March 23, the container ship was hit by a suspected strong wind as it entered the Suez Canal from the northward of Red Sea, causing it to veer off channel and accidentally hit the bottom. The cargo ship got stuck laterally in the canal, blocking two-way traffic for more than 10 hours. The Egyptian government quickly organized local rescue efforts.

The Suez Canal is one of the world's busiest maritime trade routes.The grounding of the ship, which is vital to the global transport of energy such as oil and liquefied natural gas, nearly blocked the Suez Canal laterally, preventing at least 100 ships from traveling between the Red Sea and the Mediterranean.The delay has affected the movement of cargo ships from various countries on the canal, and many ship captains have taken to Twitter to post shocking images of queuing up on the canal.

Will set off a chain reaction

A blockade of Suez, a vital shipping route, could have a knock-on effect on the global oil market. While the ship may be stuck for only a few days, it will be enough to cause volatility in the oil market and create additional problems for refiners, traders and producers already affected by the outbreak.

About 600,000 barrels of crude oil a day are transported through the Suez Canal from the Middle East to Europe and the United States.

Rather than wait for the blockade to be lifted, the stranded ships have the option of taking a detour through South Africa, though that is a much longer route that would significantly increase shipping time and costs.

If the blockage is not resolved, refiners in the US and Europe that rely on Suez to transport Middle Eastern crude oil could be forced to look for alternative sources of supply, potentially pushing up the oil prices. Analysts said buyers in Europe and the US were now likely to look at crude from other regions, such as the US, the European North Sea, Russia and west Africa. That could push up the price of crude oil in alternative regions. The flow of North Sea oil to Asia, meanwhile, could be suspended.

Large amounts of silt around the ship have to be removed to free it from the ground, and it may take two or three days to move the ship. For the global refining industry, crude oil traders and producers affected by the COVID-19 outbreak, the headache is now even greater.

The canal accounts for 1.8 percent of Egypt's GDP and 10 percent of global trade

The Suez Canal is located in Egypt, starting from Port Said in the north and ending at Suez City in the south. It is an important international shipping route connecting the Mediterranean Sea and the Red Sea and connecting Europe, Asia and Africa. It has important strategic and economic value. The Suez Canal was dug by the French in 1859 and officially opened on November 17, 1869, with a history of 150 years. Today, 22 percent of the world's shipping containers pass through the Suez Canal, accounting for about 10 percent of global trade.

Because of its critical location, the canal's revenues are a steady source of foreign currency for Egypt. In 2020, the revenue of the Suez Canal reached a record $5.8 billion in 2019, an increase of 1.3%. That compares with Egypt's annual GDP of $332.9 billion, of which the canal fees accounted for 1.80 percent.

Experienced several times of widening and dredging

In 2015, the new Suez Canal opened. The so-called "New Suez Canal" is in fact a new river about 35 kilometers long dug on one side of the old one, and 37 kilometers of the old one widened and dredged to make it suitable for larger cargo ships to pass through and make two-way navigation possible. The Suez Canal Authority said the new canal will cut the travel time for ships from the current 18 hours to 11 hours.

In fact, the Egyptian government opened four new canals in 1955 and 1980 to address the Canal's growing congestion. In the past decade, the Suez Canal has been widened and deepened to meet the needs of ocean-going shipping.

For Egypt, the Suez Canal is of great strategic importance. First, revenues from the canal are a steady source of foreign currency for Egypt. Second, the new canal will attract more foreign investment. Egypt's new canal project is not open to foreign investment because of sovereignty issues.

For foreign investors, the Egyptian government put forward a more ambitious development plan "the Suez Canal economic belt corridor", by means of the new canal location advantages, including auto assembly, high-tech electronics, petroleum refining, aquaculture, shipbuilding, light textile industry, such as the development of Egypt into a world-class economic, trade and logistics center. The Egyptian government estimates the project will bring in $100bn a year and create millions of jobs.

SUNSKY's semi-trailers are exported by ship, and our transportation routes are generally not through the Suez Canal, so customers who buy semi-trailers or used trucks from SUNSKY don't have to worry.