Suez Canal: The most expensive or cost-effective?

Suez Canal: The most expensive or cost-effective?

by Varshini & Ziva

In a time where COVID-19 has made our economy fluctuate every day, the last thing we needed was a supply chain disturbance. In the Suez Canal, that issue was delivered by a 200,000 tonne Ever Given Ship carrying 18300 containers blocking the slim canal. This overall, created a massive impact globally, creating a challenging obstacle to business while also creating learning experiences we can put to use today.

On March 23 – 26, the world was shocked as the massive Ever-given ship was lodged diagonally in the Suez Canal. With the Suez Canal being a large trading route with almost 19,000 ships passing by, an incident like this caused a major setback in our supply chain. As the blockage slowly carried on over the 3 days, the global trading industry was hit hard as $5.4 billion in the trade were we’re lost. With this, it could be felt even through the biggest companies such as IKEA. For Ikea, they had almost $100,000 of product stranded on the Ever Given, even working paired as during the time of the. In the end, it showed how even the biggest business we’re not spared. 

Looking back now from the present, we continue to see the rise and fall of businesses. Now as young business students looking towards the future, we started asking “how is the incident relevant if it took place almost 10 months ago?”. Well, in short, it gives us an important lesson on the inconsistency of the business industry. As stated before, the Suez blockage was a huge deal, creating a stoppage of transportation holding millions of essential goods. With this, for those looking into starting a business or helping manage one, it is important to not be dependent on a singular supply chain. Instead, diversifying sources of supply will better provide backups during problems such as these. Not only that but having additional supplies in your community will add to your corporate social responsibility. From this, it allows a better reflection on your company while still helping others stay afloat in these tough times.

Now although this type of problem happened a while ago, a spitting image of this today can be found in the BC floods happening in Canada right now. In this situation, BC has been damaging impacts on their infrastructure such as their highways, railroad tracks and regional oil pipeline, all-important to both Canadians and Us businesses. These floods have disrupted supply chains, specifically towards the farmer business as many livestock were lost to floods. In total the entire situation cost an estimated 1 billion dollars, along with a shortage of food such as Freshslice Pizza in Calgary and Owl’s Nest Books. Overall, it goes to show how one supply chain issue can have a massive effect if only focusing on that supply service.

In short, it teaches us a valuable lesson about the business industry’s unpredictability. As a result, it is critical for people considering starting a business or helping in its management to not be reliant on a single source of supply. The total cost of the crisis was about 1 billion dollars. Diversifying supply sources, on the other hand, will better provide backups when difficulties like this.