Blocked Suez canal minimal impact on Malaysia

  • Economy
  • Friday, 26 Mar 2021

Stranded container ship Ever Given, one of the world's largest container ships, is seen after it ran aground, in Suez Canal, Egypt March 25, 2021. Suez Canal Authority/Handout via REUTERS

KUALA LUMPUR: Disruptions caused by a container ship stuck in Egypt's Suez Canal, which has halted marine traffic through the most important waterway connecting East and West, would have a minimal impact on Malaysia, as the country's ports are well equipped to handle more than a ship at a time.

Port Klang Authority general manager Capt K. Subramaniam said Port Klang and Port of Tanjung Pelepas were the only Malaysian ports receiving calls from Europe and the Mediterranean.

"We receive ships from Europe and the Mediterranean on a daily basis and if there were delays in the calls, we can definitely accommodate two ships at a time," he told Bernama when contacted today.

Asked how long it would take to free the Ever Given vessel, Subramaniam said it would be difficult to predict as the canal is an artificial sea-level waterway in Egypt with no tides to keep the ship afloat.

Subramaniam, who was recently elected as the new International Association of Ports and Harbors president, said scores of ships were waiting at both ends of the canal to continue their journey.

On Thursday, the rescue team hired to refloat the refloat the massive container ship (400-metre-long, weighing 200,000 tonnes) said the operation could take weeks due to the nature of the canal.

According to Bloomberg and Lloyd's shipping data, between 150 and 190 vessels were waiting to cross the canal as efforts to move the skyscraper-sized vessel entered its third day.

Meanwhile, Malaysian National Shippers’ Council (MNSC) chairman Datuk Dr Andy Seo Kian Haw said with the Ever Given remained lodged at the canal, it would delay ships making port calls on schedule.

"This delay of the ships to dock on schedule will now cause a backlog in some of the ports in the trade routes in Europe, the US, as well as Asian and Oceania and it will have an impact on import shipment from European Union to Malaysia.

"However, it is too early to know if this will affect Malaysian ports. (We’re) Still assessing the potential business impact caused by the delay," he added.

Thought Partners Group Consulting founder and group managing partner Abi Sofian Abdul Hamid said the situation could affect oil tankers and oil prices in the short term.

At the time of writing, Brent crude rose 0.82 per cent to US$62.46 per barrel.

Malaysia Offshore Support Vessels (OSV) Owners Association president Mohamed Safwan Othman said a spike in oil prices means more demand for OSVs.

"(The longer it takes to refloat the vessel) It could contribute to higher demand for OSVs, adding to the busy activities happening now. The spot charter’s rates are on upward trends as well,” he said.

Asked how the rescue team would free the vessel, he said: "This could be achieved by excavating the seabed (underneath the vessel) at the channel banks, given the depth of the canal, while at the same time deploying tug boats to turn the ship around.”

The Suez Canal Authority announced that navigation through the Suez Canal is temporarily suspended and the floatation efforts included towing and pushing the grounding vessel using eight large tugboats.

The passage accounts for approximately 30 per cent of container ship traffic globally each day, with the alternative shipping route between Asia and Europe -- navigating around the African cape -- taking a week longer.

According to FreightWaves, which provide updated information on the global logistics industry, the Ever Given sails on Evergreen’s China-Europe-Mediterranean service.

Its last port of call was Tanjung Pelepas, Malaysia before transiting the Suez Canal en route to the Port of Rotterdam, Netherlands, where it was scheduled to berth April 1.

The platform also revealed that the "Ever Given" was operating on behalf of the Ocean Alliance, the space-sharing cooperative among Evergreen, CMA CGM, OOCL and COSCO. - Bernama
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!


Next In Business News

Wall Street opens lower as rally in growth stocks falters
Axiata’s tower arm edotco weighing US$700mil financing, sources say
MYAirline to operate as LCC, not ULCC
MUI sells 5.57% stake in PMC for RM6.45mil
Wiki Impact report: Bursa top 20 companies donated RM159.69mil in cash in 2021
FMM: Implementation of CPTPP is timely for Malaysian businesses to recover
Ringgit strengthens against US dollar at the close
Ancom Nylex completes acquisition of 25% stake in Ancom-Chemquest Terminals
RHB Bank Cambodia aims to become SME bank of choice by 2024
Bursa Malaysia ends higher for third consecutive day on Wall St rally

Others Also Read