Avalanche of containers bound for European ports sparks congestion fears

Ketchupeffekt is the Swedish term used by the port of Gothenburg to describe the avalanche of containers set to flood European ports in the coming weeks.

Ketchup effect – as many can imagine – describes a situation or event where not much happens for a long time, and then a lot happens at once. The significance of ketchup will be clear to anyone who has ever tried to pour the sauce from a glass bottle — usually it takes several seconds before any comes out, and then you get a huge amount.


The port of Gothenburg used the term in warning of inevitable further congestion at Europe’s gateway ports in the wake of the freeing of the 20,388 teu Ever Given yesterday, uncorking nearly a week’s logjam on the key trade artery linking Asia with Europe.

The Ever Given is now at the Great Bitter Lake where investigations are ongoing. Hundreds of ships are readying to pass it by as the Suez Canal Authority aims to clear the 350+ ship backlog in just four days. Already more than 80 ships have passed by shipping’s most famous vessel in the past 14 hours with another 85 due to transit the canal later today.

According to data from project 44 there was a total of $83.21bn worth of containerised goods stuck around the canal over the past week.

Lars Jensen, founder of SeaIntelligence Consulting, writing on LinkedIn, warned of the ripple effects North European ports can expect in the coming days and weeks as container shipping grapples to get its schedules back into shape.

In a few days, vessel arrivals in North Europe will drop sharply as the impact of the closure ripples through. This will last a week.

After that, vessels will arrive in a large spike from the opening of the canal, creating significant pressure on ports, Jensen warned. This will then be followed by a shortfall, followed by another spike when the delayed ships who have taken the Cape of Good Hope detour arrive.

Further afield, the delays and congestion will also impact the availability of available containers in Asia.

Many major European ports are already under severe duress.

In an update yesterday to clients, Hapag-Lloyd warned: “The ongoing and unchanged congestions and delays in most European ports are leading to persistent and extreme delays of ocean vessels at the PSA terminals in Antwerp. This situation has a direct impact on the performance and yard utilization capacity. With last week’s event in the Suez Canal, we know for sure that again vessels will be delayed and that the pressure on our terminals will further increase.”

PSA Antwerp, the Singapore terminal operator’s flagship European facility, has been forced to implement a seven day cargo opening rule for export containers for all Middle and Far East vessels. This means that PSA will not accept any export container more than seven days prior vessels confirmed eta. Other ports are likely to follow suit.

Caroline Becquart, senior vice president at Mediterranean Shipping Company (MSC), the world’s second largest containerline, warned over the weekend of the severe challenges to global supply chains the grounding had created.

“There’s no doubt that the current Suez Canal blockage is going to result in one of the biggest disruptions to global trade in recent years,” Becquart said, adding: “We envisage the second quarter of 2021 being more disrupted than the first three months, and perhaps even more challenging than it was at the end of last year. Companies should expect the Suez blockage to lead to a constriction in shipping capacity and equipment, and consequently, some deterioration in supply chain reliability issues over the coming months.”

Fitch Ratings said on Monday that reinsurers could face losses totalling hundreds of millions of euros from the Ever Given blockage.

Insurance and reinsurance claims would likely mainly be for damage to the Ever Given itself and to the canal, as well as dredging costs.

UK Club is the P&I insurer for the Ever Given while the ship’s hull is insured by Japan’s MS&AD Insurance Group.

Experts from the Panama flag and the Suez Canal Authority are beginning their investigations into how the giant Ever Given managed to get its bow lodged in the eastern bank of the canal.

The ship’s owner, manager and operator have cited high winds while the Suez Canal Authority has hinted it suspects human or mechanical error. The International Transport Workers’ Federation (ITF) confirmed yesterday the 25 crew of the vessel were not yet over-contract, and all were onboard for less than six months.

Source: Splash 247.com

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