Suez Canal Blockade Not Sole Hindrance to Global Trade

The blockage of the Suez Canal by the Ever Given vessel poses a potential loss of up to $10 billion per day for the global economy. This figure adds to the existing supply chain disruptions, which have already impacted trade by approximately $230 billion since the beginning of the year, according to Allianz Trade (formerly Euler Hermes).

Ana Boata, head of macroeconomic research at Allianz Trade, described the canal blockage as "the straw that breaks the camel's back." Supplier delivery times have lengthened in Europe beyond levels seen during the peak of the Covid-19 pandemic in 2020. Importers are facing issues such as container shortages and a lack of semiconductors, which are slowing the delivery of goods worldwide. These challenges could lead to increased input costs for businesses and potentially higher consumer prices.

In the UK, companies are also contending with disruptions at key ports as the country adapts to post-Brexit trade realities. These combined factors are contributing to increased friction in international trade flows.

Allianz Trade forecasts global trade to grow by 7.9% in 2021, supported by a recovery from last year's low base and strong early 2021 trade figures. However, without this carry-over effect, the growth forecast would be significantly lower, estimated at 5.4%.