What do a bow thruster, an interruption in server access and the Suez Canal have in common? Not much at first glance but stay with me as I try to join some dots.
This morning’s news included a report of a ship that had run aground in the Suez Canal. Four hundred metres long, the ship that is, my first reaction was to think software glitch or human error. My second thought was of an immediate reduction in global trade, by perhaps 10%. My third thought was of a price hike that two weeks of extra travel might mean for that 10%.
My own experience influenced what I saw as patterns. In reverse order, I had some involvement with a ship that sailed from Norway to New Zealand but went by the northern sea route, saving over a week in transit. I wrote about it last year. The ship could have used the Panama Canal but instead the vessel travelled to the north of Russia. I met the ship in New Plymouth which worked out well professionally and personally. It arrived over a week early saving my employer and the contractor huge sums of money if only because the hull and onboard equipment cost about USD200,000 a day to keep idle. And by getting it back to work a week early, the idle time was reduced. I benefitted personally too. I had to delay my departure from a visit to the Rugby World Cup which was sad for my family who returned home without me. I got to stay and see the semi-finals before I too had to fly away.
Imagine the impact on the global shipping fleet of the Ever Given blocking the canal. Trade may now have to include a trip around Cape of Good Hope. Call it a twelve day detour. A back of the envelope calculation by scaling up from 70 m seismic research vessel to 400 m container vessels suggests a five time increase in idle costs. Each vessel will cost more than a million more dollars to deliver their cargoes. Add in consumables like fuel and the opportunities lost by cargo delay, this is a big number per ship. But how many ships are there? It seems to be 50 per day. Some sources say there are already USD 8 billion of losses shared among many because of the grounding.
In my geophysical days, we assumed that at least three quarters of industrial accidents would be down to human error. In this case, there’s the possibility of a faulty navigation algorithm. Perhaps a human took control of the machines during the putative sandstorm. I don’t know. What I do know is that I once experienced a bow thruster failure that lengthened the time taken to turn a seismic vessel. An engineer in Scandinavia logged onto the engine in question that was in New Zealand at the time. He diagnosed the fault, instructed the onboard engineer how to fix it and then dispatched the replacements for the parts used by courier. The diagnosis was all done by satellite. And I got a call in Dublin at 3 am on a Saturday night to report that all was repaired in Taranaki.
A few years later, on an unrelated project, I took a call from a woman in Ireland who told me that the computer she was using in Egypt wasn’t contactable and that data processing had stalled. This was a major headache for my business because, in London, I needed the data from Algeria to help our colleagues in America and our partners in Europe to make a major investment decision. You don’t need to know how these things were interconnected but you can see that global connections were required in order for business to continue. What you also should know is that a ship had cut the data cables that ran along the coast of Egypt. And in cutting the cables, 10% of global data traffic stopped.
Aida was composed to commemorate the opening of the Suez. The canal was shut for 8 years while Egypt and the Arab nations battled with Israel. And still, the world depends on the cargos and the data that hub through the region.
So here we are again. Some 10% of global trade is lost and the price of crude oil just went up because of the blockage to shipping in Suez. Mankind’s global supply lines and procurement chains are pathetically vulnerable. And you know that the bad guys know this too.