31 thoughts on “Visualizing the Suez Canal Blockage”
Barkley Rosser
I have on this site noted previously that shipping rates had doubled due to pandemic-induced “chaos” in the global shipping system. Apparently this unfortunate event has now led to another doubling of global shipping rates. The supply side of current global economic problems has just taken another major exogenous shock.
I shall be posting shortly on the deep aspects of this shortly on Econospeak.
Bruce Hall
Just an aside on this unfortunate situation, but if someone wanted to cripple global trade, some well-place rockets in the canal would do the trick… very asymmetrical. I don’t doubt that this hasn’t crossed the minds of a few and concerned a few heads of state. Iran, for example, has resorted to mining the Strait of Hormuz.
pgl
Leave it to a MAGA hat wearing clown to suggest this. Hey Bruce – why don’t you just go into the Michigan schools and kiss all the boys infecting them with COVID19?
2slugbaits
Bruce Hall The Straits of Hormuz are a lot wider than the Suez Canal. The Suez Canal is a few hundred yards wide; the Straits of Hormuz are about 24 miles wide at their narrowest point. So while Iran might like to think it can block the Straits, as a practical matter it would only be a temporary inconvenience won at an especially high cost. As to the Suez Canal, in the event of some serious global crisis in the Mideast, I would expect Israel to have the strongest motive for blocking the Canal.
pgl
Bruce Hall flunked geography too? Go figure!
pgl
Maybe Brucie Chicken Hawk is thinking about Front Altair and Kokuka Courageous – the two oil tankers there were set afire in 2019. Of course this did not block other vessels from traveling but we know how Bruce gets just about everything wrong.
Team Trump accused Iran of doing this and threatened military action. Of course Trump was all talk and no action so the chicken hawks is Brucie boy did not their little war.
Baffling
You may be able to damage the locks, but i bet they have some pretty good air defense systems. The rest of the canal is not really affected by rockets or other external actions. To impede the rest of the canal, you need to infiltrate to block, such as the current ship. That will probably be hard to recreate, at least intentionally.
Macroduck
Targeting large vessels in the narrows works.
baffling
yes, but that does require a more sophisticated attack. a nation state, such as israel or iran, may have the ability. not sure about others, although they certainly could have an impact. there have been rpg attacks on ships in the canal in the past, but this is not enough ammo to really damage a large ship. getting larger amounts of explosive into the area and on a ship is still a rather difficult proposition. but it is certainly possible.
pgl
Evergreen operates over 150 ships some owned and some leased. This one is leased from Japanese entity even though it is formally owned by an affiliate in Panama. Evergreen’s financials can be found here:
Their formal ownership of ships amounts to 108 billion Taiwanese dollars while the value of leased ships is near 82 billion Taiwanese dollars.
Note in 2019 their operating profits were just over 4 billion Taiwanese dollars, which is rather low. The shipping sector has had dismal profitability over the past several years even before the pandemic and this accident.
pgl
Still looking forward to your Econospeak post. Hope you tell us what series you use to track shipping rates over time.
pgl
I did manage to find this measure: Shanghai Containerized Freight Index:
There apparently are a host of measures of shipping costs – many available only for a fee to the organizations they produce these series. I did manage to pull from the public domain information on this SCFI series.
Moses Herzog
Menzie, are you ready for one of those annoying moments where you wish your students/ blog readers would do their own damned homework for once??? How about putting this graph next to or adjacent to traffic from a week before the blockage or something. I think the red dots imply a bottleneck but we don’t have any “reference point”. If the FAA showed me all the traffic over the USA right now, I’d probably think it looks busy as hell also but there’s nothing connecting that to Suez.
Moses Herzog
Off-topic
I couldn’t really gauge which post this topic fit into (I guess none) so decided to put it here.
If you are to believe one of New York’s papers, Eric Adams may be the guy to give Andrew Yang a run for his money in NYC, though it’s obviously still very early. I think some of the criticism of Yang are legitimate criticisms, or have a small thread of truth in them. However I think Yang is overall a very solid guy. I’d get a kick out of seeing him win the Mayorship there: https://www.nytimes.com/2021/03/22/nyregion/andrew-yang-bias-asian-atlanta.html
I have mixed feelings on some of the criticisms of Yang. I do think that Asians as a group (we’re speaking generalities here, not “absolutes”) tend to be extremely “tight knit” and the “tight-knittedness” (is that a word??) of the Asian community can to “white people’s” eyes appear “insular” or “insulated” in kind of a …it’s hard to word and not have it come across the wrong way, but I think people can get the gist of my point. From Asian people’s view I think they see it as “Why should I/we have to jump through hoops to ‘appear’ ‘more’ American??” and they find it belittling to be expected to wear an American flag T-shirt or something to “prove” something. So I don’t know, it’s just one of those awkward things where it feels like people are walking on eggshells or something.
Moses Herzog
Stat from Tuesday’s hardcopy NYT: Mercedes Benz sold three times as many cars in China last year as it did in the United States.
Folks, that is something I think has been referred to as “soft power”, and China is learning fast. Maybe enough for “the student to teach the master”. That means when America asks Germany to help us tag team China to change some of China’s policies, Germany is very apt to tell America “go fly a kite”.
Bob Flood
What does it look like normally?
Moses Herzog
I think there must be a pull down menu with a time function there on the marine traffic site, but I’ll be damned if I can find it. One of the links said it was costing $400million per day.
I think I can ferret out ZH baloney vs the good stuff. This is worth watching if you’re super curious about the Suez situation.
SecondLook
The Suez Canal was closed for 8 years (1967-1975) due to the chronic illness of the Middle East.
I haven’t looked at the literature, but it has occurred to me to wonder how much of a contributing factor was in regards to inflation during that period.
pgl
Like ships cannot go around Africa? Shipping costs might be higher but that is about it.
SecondLook
Supply chain disruptions can quickly become quite serious, given how many companies now operate with just-in-time inventories.
“Oil prices — which lost nearly $8/b in the week ended March 20 — were lent some support on March 24 by the blockage to the waterway. ICE May Brent crude futures were trading at $63.90/b as of 1607 GMT, up $3.13/b from its previous settlement.” From SPGlobal/Platts.
What oil prices were not soaring towards $100 a barrel before this accident? Princeton Steven’s little forecast was the hopes. How much you want to be that this self servicing “consultant” is cheering for the blockage to continue until he can brag about his forecast?
How Close Are China and Germany? Consider ‘Little Swabia.’
The city of Taicang illustrates the tight ties between the countries — and how difficult it could be for President Biden to win allies in his campaign to isolate Beijing.
By Keith Bradsher and Jack Ewing
TAICANG, China — German and Chinese flags flutter along tree-lined avenues. Workers are erecting a shopping-and-hotel project with the half-timbered style of architecture more typically found in places like Bavaria or the Black Forest. A nearby restaurant serves Thuringia grilled sausages, fried pork sausages and lots of sauerkraut.
And in Erwin Gerber’s bakery nearby in Taicang, an industrial city a little more than an hour’s drive northwest of Shanghai, hungry customers can buy a loaf of country sourdough bread or a pretzel baked the way they are made in Baden-Württemberg.
“Everything you find in Germany,” Mr. Gerber said, “you will find in my bakery.”
Taicang epitomizes the deep ties between the world’s second- and fourth-largest economies. The Chinese city is so tightly knit with Germany’s industrial machine that some people call it “Little Swabia,” after the German region that the owners of many of its factories call home.
But the relationship has also raised concerns that Germany has become overly dependent on China. That could be a particularly thorny problem for President Biden, who has made isolating Beijing on trade and geopolitical issues a major part of his overall China strategy.
In December, Germany played a dominant role in hammering out an initial European Union investment protection deal with China, despite objections from the incoming Biden administration. Angela Merkel, the German chancellor, has defended the agreement as necessary to help European companies make further gains in China. She signaled in January that she does not want Germany to take sides in a new Cold War, telling the World Economic Forum, “I’m not in favor of the formation of blocs.” …
Germany has benefited from its ties with China, particularly during the pandemic. China has overtaken the United States as Germany’s biggest trading partner and become the major market for many of its companies. Mercedes-Benz sold three times as many cars in China last year as it did in the United States….
China, With $400 Billion Iran Deal, Could Deepen Influence in Mideast
The countries signed a sweeping pact on Saturday that calls for heavy Chinese investments in Iran over 25 years in exchange for oil — a step that could ease Iran’s international isolation.
By Farnaz Fassihi and Steven Lee Myers
China agreed to invest $400 billion in Iran over 25 years in exchange for a steady supply of oil to fuel its growing economy under a sweeping economic and security agreement signed on Saturday.
The deal could deepen China’s influence in the Middle East and undercut American efforts to keep Iran isolated….
I have on this site noted previously that shipping rates had doubled due to pandemic-induced “chaos” in the global shipping system. Apparently this unfortunate event has now led to another doubling of global shipping rates. The supply side of current global economic problems has just taken another major exogenous shock.
I shall be posting shortly on the deep aspects of this shortly on Econospeak.
Just an aside on this unfortunate situation, but if someone wanted to cripple global trade, some well-place rockets in the canal would do the trick… very asymmetrical. I don’t doubt that this hasn’t crossed the minds of a few and concerned a few heads of state. Iran, for example, has resorted to mining the Strait of Hormuz.
Leave it to a MAGA hat wearing clown to suggest this. Hey Bruce – why don’t you just go into the Michigan schools and kiss all the boys infecting them with COVID19?
Bruce Hall The Straits of Hormuz are a lot wider than the Suez Canal. The Suez Canal is a few hundred yards wide; the Straits of Hormuz are about 24 miles wide at their narrowest point. So while Iran might like to think it can block the Straits, as a practical matter it would only be a temporary inconvenience won at an especially high cost. As to the Suez Canal, in the event of some serious global crisis in the Mideast, I would expect Israel to have the strongest motive for blocking the Canal.
Bruce Hall flunked geography too? Go figure!
Maybe Brucie Chicken Hawk is thinking about Front Altair and Kokuka Courageous – the two oil tankers there were set afire in 2019. Of course this did not block other vessels from traveling but we know how Bruce gets just about everything wrong.
Team Trump accused Iran of doing this and threatened military action. Of course Trump was all talk and no action so the chicken hawks is Brucie boy did not their little war.
You may be able to damage the locks, but i bet they have some pretty good air defense systems. The rest of the canal is not really affected by rockets or other external actions. To impede the rest of the canal, you need to infiltrate to block, such as the current ship. That will probably be hard to recreate, at least intentionally.
Targeting large vessels in the narrows works.
yes, but that does require a more sophisticated attack. a nation state, such as israel or iran, may have the ability. not sure about others, although they certainly could have an impact. there have been rpg attacks on ships in the canal in the past, but this is not enough ammo to really damage a large ship. getting larger amounts of explosive into the area and on a ship is still a rather difficult proposition. but it is certainly possible.
Evergreen operates over 150 ships some owned and some leased. This one is leased from Japanese entity even though it is formally owned by an affiliate in Panama. Evergreen’s financials can be found here:
https://csr.evergreen-marine.com/csr/pdf/stakeholder-engagement/financial-reports/2019-Consolidated_Financial_Report.pdf?d=1616857105331
Their formal ownership of ships amounts to 108 billion Taiwanese dollars while the value of leased ships is near 82 billion Taiwanese dollars.
Note in 2019 their operating profits were just over 4 billion Taiwanese dollars, which is rather low. The shipping sector has had dismal profitability over the past several years even before the pandemic and this accident.
Still looking forward to your Econospeak post. Hope you tell us what series you use to track shipping rates over time.
I did manage to find this measure: Shanghai Containerized Freight Index:
https://porteconomicsmanagement.org/pemp/contents/part1/ports-and-container-shipping/shanghai-containerized-freight-index-scfi-and-other-freight-rate-indices/
And yea – shipping costs are soaring!
pgl.
Not any series, just news reports.
There apparently are a host of measures of shipping costs – many available only for a fee to the organizations they produce these series. I did manage to pull from the public domain information on this SCFI series.
Menzie, are you ready for one of those annoying moments where you wish your students/ blog readers would do their own damned homework for once??? How about putting this graph next to or adjacent to traffic from a week before the blockage or something. I think the red dots imply a bottleneck but we don’t have any “reference point”. If the FAA showed me all the traffic over the USA right now, I’d probably think it looks busy as hell also but there’s nothing connecting that to Suez.
Off-topic
I couldn’t really gauge which post this topic fit into (I guess none) so decided to put it here.
If you are to believe one of New York’s papers, Eric Adams may be the guy to give Andrew Yang a run for his money in NYC, though it’s obviously still very early. I think some of the criticism of Yang are legitimate criticisms, or have a small thread of truth in them. However I think Yang is overall a very solid guy. I’d get a kick out of seeing him win the Mayorship there:
https://www.nytimes.com/2021/03/22/nyregion/andrew-yang-bias-asian-atlanta.html
I have mixed feelings on some of the criticisms of Yang. I do think that Asians as a group (we’re speaking generalities here, not “absolutes”) tend to be extremely “tight knit” and the “tight-knittedness” (is that a word??) of the Asian community can to “white people’s” eyes appear “insular” or “insulated” in kind of a …it’s hard to word and not have it come across the wrong way, but I think people can get the gist of my point. From Asian people’s view I think they see it as “Why should I/we have to jump through hoops to ‘appear’ ‘more’ American??” and they find it belittling to be expected to wear an American flag T-shirt or something to “prove” something. So I don’t know, it’s just one of those awkward things where it feels like people are walking on eggshells or something.
Stat from Tuesday’s hardcopy NYT: Mercedes Benz sold three times as many cars in China last year as it did in the United States.
Folks, that is something I think has been referred to as “soft power”, and China is learning fast. Maybe enough for “the student to teach the master”. That means when America asks Germany to help us tag team China to change some of China’s policies, Germany is very apt to tell America “go fly a kite”.
What does it look like normally?
I think there must be a pull down menu with a time function there on the marine traffic site, but I’ll be damned if I can find it. One of the links said it was costing $400million per day.
Bob Flood: Can’t find pre-shock picture, but here’s another interesting graphic of ships being diverted
https://twitter.com/Michellewb_/status/1375858081603665922/photo/1
There are some interesting numbers, I think, in this video. Apologize if this is redundant or already spelled out in Menzie’s links:
https://www.cnn.com/2021/03/26/business/global-shipping-supply-chains/index.html
There’s an interview with Cecilia Rouse immediately following the video as well~~but just on the economy in general, not Suez specifically
http://feedproxy.google.com/~r/zerohedge/feed/~3/LS8kWYyi9Xs/watch-naval-historian-and-master-mariner-discuss-suez-canal-blockage
I think I can ferret out ZH baloney vs the good stuff. This is worth watching if you’re super curious about the Suez situation.
The Suez Canal was closed for 8 years (1967-1975) due to the chronic illness of the Middle East.
I haven’t looked at the literature, but it has occurred to me to wonder how much of a contributing factor was in regards to inflation during that period.
Like ships cannot go around Africa? Shipping costs might be higher but that is about it.
Supply chain disruptions can quickly become quite serious, given how many companies now operate with just-in-time inventories.
https://fred.stlouisfed.org/graph/?g=Cokp
January 15, 2018
Price of Oil, 1966-1976
(Indexed to 1966)
https://fred.stlouisfed.org/graph/?g=CokA
January 15, 2018
Real Price of Oil, 1966-1976
(Indexed to 1966)
“Oil prices — which lost nearly $8/b in the week ended March 20 — were lent some support on March 24 by the blockage to the waterway. ICE May Brent crude futures were trading at $63.90/b as of 1607 GMT, up $3.13/b from its previous settlement.” From SPGlobal/Platts.
What oil prices were not soaring towards $100 a barrel before this accident? Princeton Steven’s little forecast was the hopes. How much you want to be that this self servicing “consultant” is cheering for the blockage to continue until he can brag about his forecast?
https://www.nytimes.com/2021/03/19/business/china-germany-economy-trade.html
March 19, 2021
How Close Are China and Germany? Consider ‘Little Swabia.’
The city of Taicang illustrates the tight ties between the countries — and how difficult it could be for President Biden to win allies in his campaign to isolate Beijing.
By Keith Bradsher and Jack Ewing
TAICANG, China — German and Chinese flags flutter along tree-lined avenues. Workers are erecting a shopping-and-hotel project with the half-timbered style of architecture more typically found in places like Bavaria or the Black Forest. A nearby restaurant serves Thuringia grilled sausages, fried pork sausages and lots of sauerkraut.
And in Erwin Gerber’s bakery nearby in Taicang, an industrial city a little more than an hour’s drive northwest of Shanghai, hungry customers can buy a loaf of country sourdough bread or a pretzel baked the way they are made in Baden-Württemberg.
“Everything you find in Germany,” Mr. Gerber said, “you will find in my bakery.”
Taicang epitomizes the deep ties between the world’s second- and fourth-largest economies. The Chinese city is so tightly knit with Germany’s industrial machine that some people call it “Little Swabia,” after the German region that the owners of many of its factories call home.
But the relationship has also raised concerns that Germany has become overly dependent on China. That could be a particularly thorny problem for President Biden, who has made isolating Beijing on trade and geopolitical issues a major part of his overall China strategy.
In December, Germany played a dominant role in hammering out an initial European Union investment protection deal with China, despite objections from the incoming Biden administration. Angela Merkel, the German chancellor, has defended the agreement as necessary to help European companies make further gains in China. She signaled in January that she does not want Germany to take sides in a new Cold War, telling the World Economic Forum, “I’m not in favor of the formation of blocs.” …
https://www.nytimes.com/2021/03/19/business/china-germany-economy-trade.html
March 19, 2021
Germany has benefited from its ties with China, particularly during the pandemic. China has overtaken the United States as Germany’s biggest trading partner and become the major market for many of its companies. Mercedes-Benz sold three times as many cars in China last year as it did in the United States….
https://www.nytimes.com/2021/03/27/world/middleeast/china-iran-deal.html
March 27, 2021
China, With $400 Billion Iran Deal, Could Deepen Influence in Mideast
The countries signed a sweeping pact on Saturday that calls for heavy Chinese investments in Iran over 25 years in exchange for oil — a step that could ease Iran’s international isolation.
By Farnaz Fassihi and Steven Lee Myers
China agreed to invest $400 billion in Iran over 25 years in exchange for a steady supply of oil to fuel its growing economy under a sweeping economic and security agreement signed on Saturday.
The deal could deepen China’s influence in the Middle East and undercut American efforts to keep Iran isolated….
https://fred.stlouisfed.org/graph/?g=Co35
August 4, 2014
Real per capita Gross Domestic Product for China and Iran, 1977-2019
(Percent change)
https://fred.stlouisfed.org/graph/?g=Co37
August 4, 2014
Real per capita Gross Domestic Product for China and Iran, 1977-2019
(Indexed to 1977)