London (CNN Business)Tug boats are working to free a large container ship stuck in Egypt’s Suez Canal, halting traffic through one of the busiest and most important waterways in the world.
What’s happening: Work continues to clear sand and mud away from the Ever Given, a 224,000-ton vessel that ran aground after 40-knot winds and a sandstorm caused low visibility and poor navigation.
Ending the dramatic traffic jam, which has prevented dozens of ships from passing through, will not be easy. The effort could take “days to weeks,” according to the CEO of Boskalis, whose sister company SMIT Salvage is now working to dislodge the ship.
Big picture: About 10% of global trade passes through the Suez Canal, according to Allianz, a top shipping insurer. Lloyd’s List, a shipping industry journal, said that nearly 19,000 vessels transited the artery last year.
The incident comes at an extremely difficult moment for global supply chains. The pandemic has snarled global shipping, leaving empty containers stranded in the wrong places. Meanwhile, carmakers are scrambling to address a global chip shortage that has forced the closure of plants in multiple countries.
Allianz said ships “face costly and lengthy deviations if canal is not opened soon.” Diverting vessels via the Cape of Good Hope in the southern tip of Africa would add roughly two weeks to their journeys.
