Suez Canal blockage impacting global supply chain
A local expert from UT breaks down the domino effects of one ship holding up world trade
TOLEDO, Ohio (WTVG) - The Ever Given Container is still stuck in the Suez Canal, and with it, billions of dollars worth of cargo holding up the world’s trade.
Paul Hong, Distinguished Professor of Global Supply Chain Management and Asian Studies at the University of Toledo tells us how the Suez Canal is the gateway for the movement of goods mainly between Europe and Asia. Annually, 1.2 billion tons of cargo.
”There’s comprehensive damage for everybody involved,” observes Hong. “Daily about 10 billion dollars of goods that get transported, that means 20 percent is related to the United States.”
Hong says even a temporary blockage causes multiple backups for supply amounting to wasted time and money. It hits hard when companies do not have sufficient inventory.
“Your company may do well, but your suppliers, your customers, may be different. So you need to consider that simply because you have enough inventory you’ll be okay, that may not be a safe assumption,” explains Hong.
With so many containers waiting to be loaded with product, and others stuck in line, factory production schedules are being delayed.
There is some good news for countries like the United States, with multiple ports on both sides of the continent.
“We are fortunate in the United States to have both East and West. Anything that disrupts on one side, the other side can handle. I think that’s a geographical advantage of the United States,” adds Hong.
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