When infrastructure needs exceed capacity, Suez Canal edition

Images from this week of the Ever Given wedged in the Suez Canal are fascinating. Such a situation raises a lot of quick questions – such as “how did this happen?!?” – but there are bigger issues at work. For example, how and when does infrastructure adjust when the needs increase?

Photo by Pixabay on Pexels.com

Here is how one piece frames it:

The incident could raise new questions about the container shipping industry, which moves 90 percent of the world’s goods, and its increasingly gigantic ships. Demand for shipping goods by sea has surged during the Covid-19 pandemic, with spot prices for empty containers moving from China to northern Europe rising by more than 400 percent. In response, shipping lines have loaded gigantic vessels like the Ever Given with record numbers of containers. Ships have run into some trouble. The industry has lost more cargo into the sea in late 2020 and early 2021 than in prior years. “We’re going to get to a point where the ships are so large, it becomes a burden,” says Byers.

Goods traveling via containers – whether on ships, trucks, trains, or other means – are essential to modern economies. As markets grow and expand, there will be more shipping containers moving around the globe. That means infrastructure needs to expand. More trucks and roads. More trains. More intermodal facilities. Canals that need to be wider.

This happens primarily behind the scenes. Consumers see goods on shelves or they are delivered from vast warehouses and all is good. It is only when something goes wrong in these systems, such as a 1,300 foot ship getting stuck in a major international shipping route, that we note the tensions and the limits. Changes will be made on the Suez Canal to limit the possibility of this happening again and the shipping containers will continue to flow. Until the problem arises again or larger changes need to be made…

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