The Ever Given container vessel’s massive disruption of global trade, brought about by the “traffic jam” that it created while stranded in the Suez Canal will be incredibly costly. However, in the long run, it could give rise to a new type of shipping that could change the industry forever.
What happened with the Ever Given in the Suez Canal?
Some people still haven’t heard about the Suez Canal crisis that erupted at the end of March, when the Ever Given was shipwrecked and created a massive “traffic jam”, backlogging the trade route responsible for 12% of all seaborne trade. It is a blunder that is said to have cost $400 million for every hour that it was stranded, completely closing the second largest trading route on earth, which connects Europe to Asia. Where those costs come from and who will bear the burden of the losses is a story that is yet to be told.
The cost of the Suez Canal crisis
But, since the Ever Given was freed and shipping routes reopened on the Suez Canal, it has been reported that the Egyptian government is seeking $1 billion in compensation for the incident, which held up 442 ships and billions in cargo, according to the the Suez Canal Authority (SCA). Economic Explained sheds some light on the various mechanisms behind this, how global trade is conducted and various intricacies surrounding the transportation of massive shipping containers.
In short, the video explains how the Suez Canal crisis will affect the shipping industry, trade and the global economy. They explain how, at present there are only four ways to transport shipping containers: by ship, by train, by truck and by plane.
Shipping methods explained
Transporting containers by ship is by far the cheapest method, because you can pack up to 20,000 of these shipping containers onto a single modern day mega-vessel like the Ever Given, and it requires a relatively small crew in comparison. However, ships cannot serve land-locked nations. Therefore, many containers are transported via railways, which are the next cheapest option… but requires railways tracks, which aren’t as commonplace as roads, which is when we resort to trucks. Trucks are highly inefficient because even the largest of them can only carry three containers at a time, making it a far more expensive operation. Consequentially, it can be cheaper to send a shipping container from the UK to Australia than it would be to send it to Switzerland, for example, which is a far, far closer.
Finally, you have flying, which, in terms of cargo capacity, is the least practical. Pretty much the only advantage it has is speed, but it’s simply not economically viable for anything other than high-cost luxury goods.
Modern airships: The unexpected return of a forgotten technology
Yes, when we think of airships today, the first image that pops into our heads is that of the Hindenburg disaster in 1937. (Oh, the humanity!)
However, even though the Airships that once dominated our skies have faded from the spotlight and the airplane ended up winning the fight to be the more widely adopted technology, they are making a crazy comeback. However, this time… there won’t be any fires…
Governments around the world, such as the US, the UK and Canada, have been investing hundreds of millions of dollars into developing modern airships, which were originally being touted as an alternative to aviation, i.e. luxury air travel that allows you go on a slow flight over the arctic –the equivalent to luxury cruise liners, just floating in the air.
Naturally, modern airships cannot compete with the sheer speed that airplanes’ jet-fueled engines have to offer, but they are far more efficient, using electric motors (powered by solar panels that will have unrestricted access to the sun when flying above the clouds) and being able to carry significantly larger cargos. They also use helium containers to achieve buoyancy and are designed to make the best use of aerodynamics to achieve greater speeds than their electric motors can provide.
And because these vessels, like the Airlander 10 from the video above, are so huge and are so inexpensive to fly, they create an opportunity to completely revolutionise global shipping. Not only can they be more efficient than ships, but they also don’t require infrastructure like roads, railroads, airports and canals. They just need an area 1.5x the vessel’s size to land, meaning they can also service remote regions of the world, cutting out huge logistical limitations that make the extraction of natural resources in remote parts of the world so impractical and costly.
Not only this, but they can provide relief to places that have been struck by disaster and sending humanitarian aid will no longer be dependent on infrastructure that may have been destroyed by a natural disaster such as a hurricane, for example.
Are modern airships the future of globale trade?
There have been three blockages on the Suez Canal, similar to the scenes that we saw with the Ever Given, in the last 20 years. We know the trade routes we use, the modes of travel, are inefficient, and their shortcomings always hit the least developed nations, with poor infrastructure, the hardest. Something has to change.
It’s absolutely nuts looking back at a relic of the past, the airship, to find a solution. But the concept has been re-imagined and it could create a bona fide paradigm shift in ways that we could probably never comprehend. More and more experts are buying into the idea of using modern airships for global trade routes and the Ever Given’s disastrous spell on the sidelines of the Suez Canal has started a conversation that’s probably worth having at the very least.