This week on the news, we have seen the critical cargo situation happening in the Suez Canal. Since March 23rd, the container ship Ever Given, operated by the Evergreen Marine Corp Firm, ran aground in a horizontal position, blocking all circulation possibilities in either direction for other vessels to circulate through the canal. The ship weighs 224,000 tons, a length of 400m and width of 59m, limits the dislodging options to only one; dig around the vessel. According to the experts, the release of the ship can take from days to weeks.
Suez Canal — The Background
Since the incident’s date, around 150 ships are blocked on traffic in the middle of the canal with a vital cargo load. The canal blockage has substantial implications on the fuel, food, and other manufactured goods distributions for the Middle East and Europe. According to CNN, around 12% of the global trade of all goods transit through the canal daily.
Therefore, if the ship’s dislodging is still uncertain in time (days, weeks), it forces the Maritime Cargo companies to take alternative measures. On the other hand, the ship’s company owner, the Japanese shipping company Shoei Kisen KK, indicated that currently, all efforts are focused on refloating the vessel. The company expects claims of damages from different affected parties. However, the damage overview and identification of affected parties are not yet analyzed in detail, which brings us to the relevance of operations KPI tracking.
Maritime Cargo companies have to act fast not to have more significant losses with this situation. In this case, and even though this might implicate additional costs, the companies need to evaluate alternative routes for transporting the shipments or risk losing the cargo for damages. Based on this, the companies need to identify to plan the new routing alternatives.
What other routes are an option for delivering the different goods in the various locations?
What other alternative ports are reachable to distribute the load in the expected territory or close, and that can be complemented by intermodal (land or air) third-party allies?
Duration of the new routes
This is important as some of the goods are perishable, and therefore, the transportation time needs to be within the product’s life cycle.
Required Authorizations in government and transit areas
As these vessels are always crossing international waters, it is relevant to understand and process all required additional authorizations for the temporary alternative routes.
New Departure and Arrival Times
The new schedule times need to be programmed together with the additional staff to coordinate the shipments’ preparation at the updated schedule times.
What is the total fuel consumption during this period of using alternative routes vs. the usual fuel consumption.
Additional Fuel Ordered
How much additional fuel is required to ship the cargo through the alternative routes.
Redistribution of Cargo
It is vital to consider a priority dispatch of certain goods. Therefore, transporters should also consider alternatives to dispatch. Probably the use of smaller ships that distribute to different ports. Third-party allies that distribute the shipments via land or air.
Shipments distributed by land
Which product categories and weight can be shipped via ground (rail or trucks) to reach the customers’ expectations?
Shipments distributed by air
Which product categories and weight can be shipped via air to reach the customers’ expectations?
Shipments distributed in smaller ships
For closer destinations, it is possible to consider the perishable goods’ distribution in smaller shipments. Smaller shipments will access the destination ports through alternative routes, which were not previously due to the regular operating vessels’ sizes.
For the ships currently blocked by the Suez Canal traffic jam, it is necessary to constantly track the transported goods and evaluate the damage rate per day. The constant tracking will facilitate the analysis and identify the parties that will present compensation claims. Alternatives for assessing the damages involve multiple variables.
Perishable products lifecycle
Some products, such as food, have a reduced life cycle, and therefore, if the block of the canal takes weeks to be solved, many of these goods will perish in the process. It is necessary to understand
The region where the blockage occurs it’s constantly exposed to very high temperatures. The equipment of containers to maintain the required temperatures for a longer time is crucial. In case there are issues with keeping the containers with the expected temperature conditions for a longer time, it is necessary to assess the damages of the goods.
Determine the categories with the highest damage rate to search for transportation alternatives for the products that perish faster.
Ports need to evaluate if they have enough capacity to load or unload the ships within the new expected arrival times or if they are already with a 100% occupation rate at the desired alternative times. This measure might also implicate the requirement of extending the operation to outside regular operating times to mitigate the situation’s impact.
Additional expected ships per day
Track the number of additional vessels arrived vs. the extended schedule.
Extra Operating hours required
How many hours outside the regular operations do the port need to operate? These measures should also have government approvals and acceptance.
Additional staff required to attend the unloading of the upcoming ships to operate outside regular hours.
Delays become more crucial than ever as the port’s congestion can be higher with upcoming shipments.
In conclusion, having the constant tracking of measures might help react to the ship companies faster and give an overview of the damages and costs this situation implies. The thorough real-time monitoring of these KPIs will enable more accurate decision-making, reducing this unique situation’s impact.
Mostafa Salem, Magdy Samaan, Pamela Boykoff, Mick Krever. Dislodging the huge ship blocking the Suez Canal could take ‘days to weeks,’ as the traffic jam builds. Edition CNN- Middle East. March 25th, 2021.