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No severe disruption to Indonesian trade from Suez backlog, but shipping concerns loom
The shipping backlog and the alternative route that some operators have chosen, around South Africa’s Cape of Good Hope, are expected to raise fuel costs.
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Tugboats pull the MV Ever Given, a 400 meter long and 59 meter wide container vessel lodged sideways across Egypt's Suez Canal on Monday. (AFP/Handout)
T
he shipping backlog at the Suez Canal is expected to cause only modest disruption to Indonesia’s trade in the coming weeks as the route serves relatively minor trading partners Africa and Europe, but the episode may lead to rising transportation costs and uncertainties in shipping schedules, observers have noted.
Egypt’s 193-kilometer long Suez Canal has opened again after the nearly 400-meter long container ship Ever Given, one of the world’s longest, was refloated on Monday. The ship became stuck in the vital global shipping route on March 23, bringing billions of dollars worth of trade to a standstill.
Read also: Ever Given container ship blocking Suez Canal has started to move
Canal authorities are now working to clear a queue of ships near the canal, a process that may take four to five days, while clearing the knock-on backlog at other ports might take months, according to a United Nations Conference on Trade and Development (UNCTAD) official reported by Reuters.
Shinta Kamdani, deputy chair of the Indonesian Chamber of Commerce and Industry (Kadin), said the obstruction of the canal was expected to disrupt the country’s trade with European and African countries.
The interruption was also expected to lead to increases in logistics prices as businesses were facing shortages of shipping containers. The backlog of shipping and the alternative route that some operators chose, around South Africa’s Cape of Good Hope, were expected to raise fuel costs.
“Other markets are fine as we do not take the Suez route or we can take alternative routes, such as the Pacific for trade with the United States,” Shinta told The Jakarta Post on Monday.
