Latest efforts to free massive ship from Suez Canal fail – Here are the next steps

The massive ship has been blocking Egypt’s Suez Canal for the fourth day. It’s creating a traffic jam for more than 200 vessels. The U.S. Navy is planning to send a team of experts to help. NBC’s Raf Sanchez joins ‘The News with Shepard Smith’ to discuss. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

The Ever Given, one of the world’s largest container ships, is still wedged in the Suez Canal, and the economic effects from the blockage — now in its fourth day — are beginning to unfold.

White House Press Secretary Jen Psaki said Friday that the U.S. is monitoring the situation closely. “We’ve offered U.S. assistance to Egyptian authorities to help reopen the canal…those conversations are ongoing,” she said during a press briefing, before adding that there could be “some potential impacts on energy markets.”

Oil prices jumped on Friday, amid speculation that dislodging the ship could take weeks. West Texas Intermediate crude futures and Brent crude each advanced more than 4%. The gains come after prices dipped on Thursday, despite the gridlock.

“Traders, in a change of heart, decided that the Suez Canal blockade is actually becoming more significant for oil flows and supply deliveries than they previously concluded,” said Paola Rodriguez-Masiu, vice president of oil markets at Rystad Energy.

Of the 39.2 million barrels per day of crude imported by seaborne methods in 2020, 1.74 million barrels per day passed through the Suez Canal, according to data from research firm Kpler.

This represents under 5% of total flows, but as the build-up stretches on, the impacts rise.

Bernhard Schulte Shipmanagement, the technical manager of the ship, said another attempt on Friday to re-float the cargo carrier proved unsuccessful.

A specialized suction dredger that can shift 2,000 cubic meters of material every hour is now on the site, and “arrangements are also being made for high-capacity pumps to reduce the water levels in the forward void space of the vessel and the bow thruster room,” the firm said Friday.

Bernhard Schulte added that two additional tugboats will arrive by Sunday to help in the re-float operation.

Douglas Kent, executive vice president of strategy and alliances at the Association for Supply Chain Management, noted that even after the ship is dislodged the impacts will continue to be felt. Ships will arrive at ports simultaneously creating new traffic jams, for instance. Cargo schedules created months in advance will need to be reshuffled with ships now sitting in the wrong place.

More importantly, there’s a lack of visibility throughout the entire supply chain.

“The whole knock-on effect through the multi-hierarchy of the supply base — we’re not going to know that,” Kent said. “Companies don’t have visibility into their supply chain.” While a company might know it has a product sitting on a ship that’s stopped, the impact of delays down the line are unknown.

The Suez Canal handles around 12% of global trade, making it an essential point of passage. Each day of blockage disrupts more than $9 billion worth of goods, according to Lloyd’s List, which translates to about $400 million per hour.

Some ship operators have already decided to re-route their vessels, anticipating that the Ever Given won’t be dislodged soon. Sending ships around the Cape of Good Hope adds more than a week of sailing, while also increasing costs.

“It’s a terrible mess,” said Anthony Fullbrook, president of OEC Group’s North American region.

The disruption caused by the backlog in the Suez Canal comes as global supply chains are already strained by Covid-19.

“There’s already a shortage of equipment, of space, everything’s operating at peak capacity … It’s already slowly melting down, and this will just exacerbate it,” he added.

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  1. Put pipes pouring water were the nose is stuck in sand and water and pull it from the back with navy ship

  2. The captain tried to execute a maneuver that he mastered in Ship Simulator 2021, but the physics in that game are notoriously broken.

  3. The name of the operator is Evergreen. In a world of symbolism, e.g. orange and greens, does it not seem odd? How does a gust of wind turn a 200000 ton boat? What speed was this gust?

  4. God is once again parting the Red Sea. Please pray for the children that are being kidnaped and being put in shipping containers by human traffickers. The World is watching this is going to be Biblical.

  5. Somali refugees in Sweden are leaving the Nordic country back to Somalia, they have prospects of making bigger profits in their homeland.

  6. In my opinion, first to increase the weight of the ship (can pump more water) for the ship to sink more and then reduce the ship’s load, the ship will emerge as before but then the ship will not hit the bottom, it will be easy pulled out over.

  7. Who cares about fake news channels.. Tall are lying threw for rotten teeth.. Show the video of creepy Joe Biden admitting he made Ukraine fired the guy that was investigating his son Hunter Biden show that video we all seen it show it some more

  8. Drop the cargo on desert with heavy cargo heli. Arabs don’t solve it on purpose. Something is not right there

  9. 1:05 Is crazy to think that the Portuguese did that route to reach India 500 years ago. 500 years later a stucked ship returns the history of navigation.

  10. Piracy threat?! Is this guy incapable of looking at a map?! All these ships have already passed half of Somalia. Going the other way wouldn’t make much more of a difference. Thanks your alarmist subtle racism, exactly what the moment called for.

  11. What about some real news? Mexico is overrun with the coronavirus and hundreds of thousands are being released into the population, but apparently American lives are expendable as long as it gets them votes when they pass a bill allowing illegal aliens to vote!!! You will pay taxes to support the largest immigration wave in 20 years and people that don’t pay taxes will get to vote who makes the laws you are governed by. Are your own country citizens expendable to the coronavirus now?

  12. Send a destroyer to scout the ships through the bigger path. Piracy problem solved.