Sal Mercogliano, history professor at Campbell University, joins ‘The News with Shepard Smith’ to discuss what happens when there is a backlog of ships at the Suez Canal. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
The shipping delays could impact everything from the clothes and shoes you ordered online to gym equipment, electronics, food, and energy supplies — meaning gas prices could get higher, too.
“Suez Canal container blockage to further rattle global supply chains, to drive pricing higher given pent-up demand,” analysts at JPMorgan said in a research note Thursday.
The man-made Suez, at 120 miles long, is a key transit point connecting East to West. And the 20,000 ships that pass through it yearly transport everything from oil and gas to machine parts and consumer goods.
While it’s still early to say what the full impact of the tanker crisis will be, the bank expects that in the near term, “the blockage is likely to add to industry supply strains, which are already hampered by ongoing supply chain bottlenecks″ in the form of port congestion and shortages of both vessels and containers due to Covid-19.
Ships are going to have to shift to entirely different routes, “will result in longer voyage times and causing further delays,” JPMorgan wrote.
And those delays could be more than 15 days for many ships, whose alternative is sailing around the Cape of Good Hope at the southern tip of Africa, which analysts say would increase shipping times by up to 30%.
“The immediate impact of delays in the canal will centre on European – Asian trade, adding delays to already disrupted supply chains affecting oil and refined products’ supplies,” ING senior economist Joanna Konings wrote in a client note Wednesday.
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