| 25 May 2024, Saturday |

Shipping costs could rise due to prolonged Suez Canal blockage

Global shipping costs could rise due to the prolonged blockage in the Suez Canal,  according to a London-based research firm Capital Economics.

This deadlock could also “exacerbate goods shortages” if it takes “more than a few days” to free the huge container vessel .

“If the grounding of the huge container ship in the Suez Canal is not resolved soon, it could push freight rates even higher … causing a further rise in manufacturers’ costs and exacerbating temporary supply shortages,” Capital Economics said in a note to clients.

However, there will not be any lasting effects on the world economy, if the blockage is resolved soon and in the meantime, the ships can be diverted around Africa, it added.

The Suez Canal, dug more than 150 years ago, is one of the world’s most important trade routes.

Nearly 19,000 ships, or an average of 51.5 ships a day, pass through the canal with a net tonnage of 1.17 billion in 2020 alone, according to the Suez Canal Authority.

Tariffs paid by ships entering the waterway are a major source of hard currency in Egypt.