The Ever Given and the Global Economy
Today, we're going to be talking about the Ever Given and the jamming of the Suez Canal. This is going to be a real brief one – we're actually shooting this at the end of this mini crisis.
But before moving on, it's worth recognizing that the jamming of the Suez Canal is really a microcosm of what goes on in our global economy today. Everything is connected.
Jamming the Suez Canal - 12% of the World's Goods
Did you know that 12% of all of the goods in the world and about 30% of all the oil on the planet travels back and forth through the Suez Canal? I showed a picture of this to one of my kids and my kid said, "Are you kidding me? It's only a one lane highway going each way and that's 12% of all the goods in the world? That's incredible. Somebody needs to build another canal and compete."
That's a fascinating conversation. I don't think that any of us are going to be putting together enough real estate to dig a competing canal to the Suez Canal, but amazing the way young people think today...
Anyway, we were seeing roughly $10 billion a day of goods backup – it took Tuesday, Wednesday, Thursday, Friday, Saturday, and Sunday before they get it unclogged. That's $60 to $70 billion worth of goods sitting on ships, waiting to get through that one lane highway.
How the Ever Given Can Affect Your Daily Life
Even as the commotion fades, the Ever Given getting jammed in there and stopping so much trade is an example of how small things can affect global markets in big ways.
Look at what oil did in the last week with the concerns about the delays. Even if you turn those tankers around that were waiting, it was going to take them two weeks longer to get down and around the Horn of Africa. That's two weeks' delay on billions of dollars – hundreds of millions of gallons of oil – and all the sudden global markets are starting to move in the wrong direction. We are all connected today.
As a side note - if you haven't seen them, go look up some of the memes on the Ever Given in the Suez Canal. They have been fantastic.
Here at Vizionary Wealth Management, we're always here with perspective for the decisions ahead. If you have any questions on this or any other matter, don't hesitate to reach out. Have a great day week.