Tuesday, November 30, 2021

Minimal impact for Malaysia as ship remains stuck at Suez Canal

Malaysia's trade volume in the region is not large, although there could be delays in some shipments as efforts continue to refloat the 400m Ever Given cargo ship.

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Industry sources expect only minimal impact for Malaysia as marine traffic came to a halt at one of the world’s busiest shipping lanes after a 400m cargo ship became wedged across a vital passage at the Suez Canal.

Ever Given, a Japanese-owned ship carrying 200,000 containers of consumer goods bound for European markets, became stuck yesterday after it ran aground diagonally across the thin Suez Canal off Egypt following high winds and a dust storm.

It is estimated that some 150 ships are waiting for the waterway to be cleared.

The Suez Canal serves as a conduit between Africa and Asia, and handles about 10% of international maritime trade.

According to shipping news journal Lloyd’s List, the deadlock caused by the incident could halt about US$9.6 billion worth of daily marine traffic in both directions.

Much of the cargo plying the route consists of perishable consumer goods as well as crude oil from Asia heading to Europe.

However, Malaysia’s trade volume in the region is not large.

“We are not a big buyer from that region,” a maritime operator told MalaysiaNow on condition of anonymity.

“If you have goods on board and if you need the goods to arrive at your buyer’s place and if it’s time-sensitive, then it will be affected.

“But Malaysia is not a big exporter to that region because we don’t receive goods in large quantities from the Suez Canal.”

Experts say the ship incident could have a global economic impact depending on how soon the waterway can be freed.

“The longer it stays there, the more damage it will cause to the economy,” said economist Barjoyai Bardai of Universiti Tun Abdul Razak.

Meanwhile, Yeah Kim Leng, an economics professor at Sunway University Business School, said the losses would mostly be faced by shipping companies.

“Given that it will take a few days to dislodge the supertanker and allow normal traffic to resume, the economic impact is likely to be small,” he told MalaysiaNow.

Meanwhile, a local maritime firm said its cargo ships would be affected in terms of estimated arrival time.

Due to the blockage, cargo ships now have to take a different route through Africa towards Rotterdam, Netherlands.

“It will take an additional 26 days,” said Jeyenderan Ramasamy, director of Maritime Network Sdn Bhd, a shipping company based in Klang.

He said it would mean additional costs, due to the longer journey which requires more fuel.

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