Suez Canal blockage: an analysis of legal impact, risks and liabilities to the global supply chain

Abstract

The global supply chain currently thrown into chaos due to the Suez Canal incident. On 23 March 2021, the Suez Canal, one of the most heavily used shipping routes, was blocked by vast container ship – the Ever Given. Affecting over 400 vessels scheduled to pass through the Canal in the East-West and West-East directions. Such vessels experienced a dilemma of the use of routes and schedules. Other victims included vessels that were scheduled to arrive at/pass through the Canal, shippers, consignees, ship operators, ship owners, and container terminals. About USD$15 to 17 billion has been held up. This paper aims to reveal the potential damage caused to parties involved and examine the liability of parties involved. Specifically, the impact and legal consequences of the obstruction such as how the scope of general average applies as well as the possible solutions to minimise damage are discussed, followed by future developments. These results suggested that maritime transport support global supply chain linkages and economic growth, any disruption could bring huge impact and costs on various stakeholders along the supply chain. On this basis, the world should learn a lesson from this incident and the need for thoroughness prevention measure should be considered.