suez canal

The Importance of the Suez Canal & Supply Chain Sustainability

The Suez Canal is one of the most used waterways globally and arguably the home to the most sustainable transportation method, shipping. The Suez Canal recently made headlines as the ship “Ever Given” became lodged horizontally, halting maritime traffic entirely for several days. Each hour the ship was stuck meant roughly $400 million in revenue lost in transported goods. Even worse, the vessel has blocked the canal for several days, which will mean weeks of delayed product all across the globe. Just another blow to many ecommerce owners during an already stressed supply chain due to COVID-19.

As the global economy experiences a resurgence of the economy as more countries lift lockdown restrictions, researchers are saying we have to better prepare ourselves for these supply chain delays in the future. 

So what can we do to minimize the impact of these delays? We need to start thinking about sustainable transportation and supply chain management.

The importance of the Suez Canal

The Suez canal connects the European coast with Asia allowing ships to avoid having to trek the dangerous and lengthy cape of Africa, making it a vital transportation waterway. It accounts for 30% of container ship traffic every day and about 12% of all world trade goods.  

The Canal allows travel in both directions, accommodating on average about 51 ships per day. The northbound traffic accounts for mainly oil, wood, coal, chemicals, and steel. While southbound accounts for many European goods, cereals, and livestock. When blocked, the Suez Canal not only results in delayed arrival time of cargo but will mean both Northbound and Southbound ports will be overwhelmed and backlogged in processing and handling times.

Shipping is one of the most sustainable transportation methods and still one of the most cost-effective, making this blockage a seriously costly problem for many ecommerce owners.

Shipping & Supply Chain Sustainability 

Shipping or also known as maritime freight transportation is one of the oldest and most affordable ways to transport goods. Shipping has lower emissions and is lower in energy consumption than air or train transportation. Larger loads mean more transportation of goods at lower costs. Additionally, it’s one of the safest ways to transport goods, making it favorable for insurance costs

It’s not to say that this shipping is 100% without challenges. Shipping means slow lead times. The environmental impacts are still prevalent despite its claim to sustainable traveling as shipping causes noise pollution and disrupts marine and soil life. 

Going forward, Shipping will also mean reliance on the climate. Researchers warn that heavier weather patterns, such as the wind storm and high tide that pushed the “Ever Given” into this situation, will remain more and more of a threat to our supply chain. So how can consumers and business owners best prepare for the future? 

We must begin to look at supply chain sustainability. 

How can we make our supply chain more sustainable?

The Suez Canal incident addresses the fact that more eCommerce business owners need to start looking at ways to create more sustainable supply chains and pay closer attention to their triple bottom line. 

We work with our clients at Clearinity to help them see their internal and external operations’ holistic visions. We then optimize them to benefit the bottom line, their employees, and the environment. 

A past Clearinity Client recently told us, “Honestly, it makes me sick to think about having to air-ship products to keep my supply in line. Yeah, it costs me more money, but mostly I’m concerned about the fact that every carbon footprint calculator I pull up shows that air-freight produces hundreds or thousands of times more carbon than using ocean freight. It just makes me sick to think about.” 

At Clearinity, we know that the triple bottom line helps businesses become successful and scalable. Part of the triple bottom line is paying attention to and supporting more sustainable transportation. Some business owners begin to look at ways they can ship cleaner like our client above. Others start to look at ways they can source products locally when possible. 

Our approach to people, processes, and technology allows us to work together to bring a brighter future to your business and the global trading community.