July 25, 2021

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Maritime historian sees ‘ominous’ signs that the Suez Canal blockage may take time to fix – CNBC

2 min read

Former Merchant Mariner Sal Mercogliano said Thursday he sees new and ominous signs that the 220,000-ton mega ship blocking Egypt’s Suez Canal may take a lot longer to remove than initially thought. 

“One of the most ominous things we are seeing, right now, is the parent company, Evergreen, has started to route two of their vessels around Africa,” Mercogliano said. “That’s telling us this may take a lot longer than they were initially expecting.”

Rescue crews have said that it might take weeks to set the behemoth Ever Given vessel free. Officials say strong winds and a sandstorm knocked the ship off course. Shipping experts say the containers on deck can act like giant sails during windy conditions.

Mercogliano CNBC’s “The News with Shepard Smith” that the blockage of the Suez Canal has put the global supply chain “in a state of flux.” According to reporting from NBC, $3 billion worth of goods typically traverse the canal every day, with more than 150 ships now in a holding pattern on either side of the waterway. 

“Most importantly right now, the ports that were expecting to receive these vessels are not receiving these vessels, and you’re going to have a situation very similar to what we’re seeing in the U.S. right now with ships lined up off our ports, because demand was pent up, in this case, supply is being held back,” said Mercogliano, a Campbell University professor, during the Thursday evening interview. 

The man-made Suez is a key transit point connecting East to West and is 120 miles long. Ships will have to shift to entirely different routes due to the blockage and sail around the Cape of Good Hope at the southern tip of Africa.

Mercogliano explained with that extended route, “you’re talking about adding 3,500 miles on a route from Singapore to Rotterdam, you’re talking about 12 to 14 days.”

The maritime historian added that while the Ever Given’s misfortune has already impacted oil prices, factories might be next. 

“There may be production plants, automobile factories, for example, will have to shut down, waiting to get parts,” he said. “We don’t live in a society today where we store a lot of parts.” 

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