Asian and European businesses, which rely heavily on the Suez Canal to move their products between the regions, are weighing contingency plans as efforts to move a ship blocking the canal drag out.
With work by salvage crews to dislodge the grounded container ship Ever Given stretching into a fourth day, businesses in Asia and Europe are now expecting freight costs to climb and shortages of shipping containers to worsen, after they endured months of higher costs and delays due to already stretched supply lines during the pandemic.
Jack Yang, the founder of Yiwu Jin-Jack Import & Export firm, which sells goods such as umbrellas and jewelry from its base in eastern China’s Yiwu city, said several of his clients are now considering sending goods by rail to Spain and Germany instead of dealing with a potential prolonged blockage of the canal.
Others may be forced to consider airfreight. But rail or airfreight aren’t viable alternatives in many cases, because of the volume of the cargo or the higher costs involved.
“To put things in perspective, if you were to put the entire 20,000 containers on the Ever Given [on a plane], you’d need 2,500 [ Boeing ] 747 air freighters,” said Tim Huxley, chairman of Hong Kong-based Mandarin Shipping Ltd.
