Friday 1 March 2024

Ever-Given blockage unearths Suez Canal's fragility even after its 2015 expansion.

Contemporary philosopher, Nassim Nicholas Taleb warned about the fragility of complex systems that seek to achieve efficiency. These systems are vulnerable to consequential events that are difficult to foresee. The Suez Canal experienced this phenomenon after the Ever-Given liner ship blocked the channel which brought its operation to a halt for almost a week.

By Radithebe Rammutle

There was a sigh of relief when the Suez Canal was reopened on 29 March following the dislodging of the Ever-Given container ship. The 200 000-tonne vessel ran aground and was stuck some distance from Great Bitter Lake for nearly a week in the channel.

The erection of the Suez Canal, in 1869, optimized global supply chains and logistics. Until then, freight travelled via the Cape of Good Hope trade route which takes up to 6 to 8 weeks to reach west/eastbound destinations.

The then 164-kilometer (currently 193 kilometers) canal shortened travel time by at least two weeks. Economists (or MBA types) marvel at the human ingenuity that brings such efficiency. Today there are about 46 liner shipping services whose ships transit the canal on a fixed schedule.

The Suez Canal Authority, in its 2019 annual results, reported that 18 880 ships utilized this route carrying 41% of all global container traffic. Overall, the canal accounts for 12% of all trade, making it one of the most important infrastructures in global trade and commerce.

However contemporary philosopher, Nassim Nicholas Taleb, warned that optimisation that appear to bring efficiencies introduces fragilities that are difficult to observe. Due to these fragilities, optimised systems are often unable to withstand random events with catastrophic consequences. Taleblabeled these events Black Swans or Grey Swans. Grey Swan is different from the Black Swan in that it is an event that is possible and known since it happened before.

For as long as everything is running smooth, these events are ignored and underestimated. In 2015, the SCA added a new shipping lane to allow two vessels (one north and the other southbound) to pass without stopping or interruptions.

However, the area south of Bitter Lake where Ever-Given was stuck only allows one ship to pass. This project also involved deepening and widening some of the choke points to allow bigger ships to pass through. The channel is now 205 meters wide and 24 meters deep (see table).

With these improvements the SCA intended to reduce the canal's fragility. However, the Ever-Green incident showed that these improvements were not adequate to allow safe passage of bigger ships.

This is because the artificial waterway was not built for megaships such as Ever-Given. Ships such as Ever-Given have a maximum beam of 60-meters (the ship's width at its widest point) and a full loaded drought (the height of the ship below the sea level) of 15 meters. Considering the channel's depth (24 meters) it means the Ever-Given had a clearance (the vertical distance from the bottom of the ship and surface of the sea) of 9 meters when it passed through the channel.

These Golden Liner class ships are equally amongst the longest vessels at 400 meters. They could easily be sucked into a bank hold if they veer towards the bank of the channel. This is because there is a space of about 145 meters to undertake corrective maneuvers to get out of the hold. Given the length of the ship, it will take brinkmanship abilities to perform such maneuver even with a built-in mechanism to ensure safe passage (It is required that the canal's authority pilot with special knowledge of the transit challenges should help the shipmaster to navigate the channel when passing through). These technical factors including weather conditions coalesced to create the perfect storm.

The Ever-Given blockade is by no means a Black Swan event considering that it was not for the first time that the channel experienced such operational failure. It is the sixth ever since the channel opened for business. Out of these six events, two operational closures were due to political reasons while the rest were technical reasons.

Thus, the Ever-Given event could be regarded as the Grey Swan event, a less life-changing event nonetheless important given its multiplier effect. The supply chains schedules were adversely affected. Osama Rabie, the ship canal's authority Chairman, announced that the authority was losing between $14 million and $15 million a day during the blockade.

Most importantly, the Ever-Given blockade demonstrated that the artificial waterway is still fragile. Thus, both the canal authority and users need to build redundancies to improve robustness across the global supply chain. The Canal Authority might need to expand its capacity while users should consider building adequate facilities and warehouse space to store backup inventory.


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