Business

Ikea furniture, tea and French oak: goods held up by Suez canal blockage

A vast range of goods from Ikea furnishings to tens of thousands of livestock were stuck in the maritime traffic jam caused by the Suez canal blockage.

More than 360 vessels were stranded in the Mediterranean to the north of the canal and in the Red Sea to the south when the giant container ship MV Ever Given became wedged diagonally across the vital waterway on 23 March. The ship was freed on Monday.

Many ships were also stuck in holding zones along the length of the canal in Egypt. Industry experts have estimated the total value of goods marooned at sea at anywhere between $3bn and $9.6bn.

Some 1.74m barrels of oil is normally shipped through the canal every day, but 80% of Gulf exports to Europe pass through the Sumed pipeline that crosses Egypt, according to Paola Rodriguez Masiu of Rystad Energy.

According to MarineTraffic, about 100 ships laden with oil or refined products were in holding areas Sunday. Crude prices shot up on Wednesday in response to the Suez blockage before dropping the next day.

Apart from goods, some 130,000 head of livestock on 11 ships sent from Romania have also been held up.

Egypt has sent fodder and three teams of vets to examine livestock stuck at sea, some bound for Jordan.

Ikea, the Swedish furniture and homeware giant, said it had 110 containers on the Ever Given and other ships in the pile-up.

“The blockage of the Suez Canal is an additional constraint to an already challenging and volatile situation for global supply chains brought on by the pandemic,” an Ikea spokesperson said.

The Van Rees Group, based in Rotterdam, said 80 containers of tea were trapped at sea on 15 vessels and said there could be “chaos” for the company as supplies dried up.

Dave Hinton, owner of a timber company in north-west England, said he had a consignment of French oak stuck on a ship.

The oak had been sent from France for reprocessing into veneered flooring in China, and was on its way back to a customer in Britain, Hinton said.

“I’ve spoken to my customer and told him the bad news that his floor was blocking the Suez Canal. He didn’t believe me, he thought I was pulling his leg,” he told BBC radio on Friday.

Shipping companies such as Maersk have re-routed ships on the longer journey around South Africa’s Cape of Good Hope, adding at least seven days to the travel time.

Even after the Ever Given has been dislodged, Maersk estimates it will take between three and six days for the stranded ships to pass through the canal.

According to Lloyd’s List, up to 90% of the affected cargo was not insured against delays.

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