The winners and losers emerging from the Suez Canal crisis

For nearly a week, the Suez Canal, a major pathway among the world’s shipping routes, was blocked by a major container ship, the Ever Given. Despite the short-lived block, there were immediate after-effects and the long-term ramifications are still yet to be seen, though we have found a few key indications.

The Suez Canal is one of the most trafficked ports and to literally get around the block, companies were forced to re-route, take detours or opt for alternative shipping methods, causing delays and potentially losing any perishable products that were sitting in a freight container. While a blockage is extremely rare, the incident has forced scrutiny on the supply chain risk companies face, which may impact future strategies.

We took a look at some key players who had interesting insights and outcomes from the Suez Canal Crisis. In our research within the AlphaSense platform, we found a 566% increase across company docs and research mentioning the “Suez Canal” or “Suez Crisis” over the last 45 days (AlphaSense users, click here for a saved search link for the platform.)

The fallout from The Suez Canal: Who’s affected?

The losers

Insights and outlooks across multiple research and analyst reports pointed out that the most affected by the Suez Canal crisis would be industries reliant on container shipping, Panamax, and Supramax bulkers. This includes manufacturing plants and would affect European imports, resulting in items (such as toilet paper and coffee) being out of stock or having elevated prices.

In the U.S., some imports and retailers may be affected if there’s a measurable impact on container availability and, as you’ll see below, fashion retailers will also experience delays due to the Suez Canal crisis.

The winners

Many of the research documents we found pointed to a clear winner: the shipping industry. Freight, air freight, and container shipping companies are likely to benefit from this crisis due to rising shipping rates and because companies opted for different shipping routes, re-directions and alternate methods.

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Key transcript statements around the Suez Canal crisis

Even after the block was removed, we have seen some companies specifically reference whether and how this crisis will impact them. Here are some key examples.

 

 

 

 

The outlook for the future

Fortunately, many of the worst-case scenarios were avoided because the blockage only lasted a week. But it doesn’t mean companies won’t be feeling the after-effects of this disruption beyond Q1 and Q2 of this year. Along with the pandemic’s long-lasting effects, this may lead companies to take another look at their supply-chain and see what they can do to reduce the risk of a problem like this from happening again.

To get even more insights on the global market and how the pandemic recovery looks like, check out our Expert Briefing Series featuring Torsten Slok, Chief Economist at Deutsche Bank Securities.