Korkidis: Avoiding the Suez Canal has a major impact on word trade

Given that 90% of world trade is carried by sea, the effect on transit prices, but also on fuel costs, is inevitable," the president of the Piraeus Chamber of Commerce and Industry, Vassilis Korkidis, underlined in a statement regarding the attacks on commercial ships passing through the Red Sea and the Suez Canal and their effects on trade.

"If the intervention of the US with the first group of EU countries and NATO, which took action to safeguard the freedom of navigation in the Red Sea, does not pay off soon, then the economic losses will reach many billions of dollars every day on a global scale. The 10-day closure of the Canal two years ago caused a 2-week delay in arrivals at Piraeus and other Mediterranean ports, as well as 3-4 weeks of additional time for final deliveries of goods. The delay of the ships, with cargoes worth more than 9 billion dollars, is estimated to have cost, on a global scale, about 6 billion dollars for each week of delay. However, fares favoured, especially for oil tankers which doubled due to the rerouting of many ships on the long 15,000 mile route around Africa, while greater demand for ships was created due to the stranding of 320 ships in Suez.

The main impact from avoiding the canal is on the energy market, leading upwards the price of oil. Among the ships waiting on the Mediterranean side are several tankers carrying 9 million barrels of oil a day to and from Asia, with cargoes mainly from Kazakhstan, Russia, Libya and Azerbaijan. In addition, the Canal handles the movement of 4% of the world's LNG volume, on an annual basis. The major shipping companies will charge the consignees of the cargoes with additional costs for each day of delay. It should be noted that the Suez Canal, 120 miles long, is the fastest shipping route connecting Europe and Asia, with a monthly net cargo transit of more than 100 million tons, corresponding to 12% of the world's volume and 30% of containers, amounting to 1.4 million dollars monthly.

In an envionment of energy and inflationary pressures, global trade is suddenly facing a kind of "blackmail" from the Houthis, who have aligned themselves with Hamas, and are launching missile attacks against ships, affecting international shipping and trade. Despite its regional character, it has an impact on international navigation. Maritime organizations such as Bimco, Intercargo, ICS and ECSA have asked for measures to be taken with the formation of a multinational force of a fleet of warships to police the area and de-escalate the tension. The companies BP, Maersk, MSC, CMA, Hapag Lloyd, after the increase in war risk insurance premiums, immediately announced the suspension of crossings from Eritrea and rerouting with a circumnavigation of Africa, which means an additional 10 days of travel for 700,000 TEU, with goods of value 35 billion dollars and of course damage to the ports of the eastern Mediterranean and especially the largest one, which is the port of Piraeus. Instructions are expected from the Greek Ministry of Shipping to the Greek-owned ships moving in the maritime area, while the Maritime Directorate of the Coast Guard has already issued recommendations to crews for vigilance and night sailing.

Since 90% of world trade is carried by sea, the impact on transit prices, but also on fuel costs, is inevitable. We hope that there will be a rapid de-escalation of the tension and that the "perfect storm" will be avoided, because we are going through a period when global trade needs calm and the supply chain needs the availability of the world's largest Canal."