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Expect Delays: Red Sea Crisis is Still Hitting Timber Supply Hard

The Egyptian president reports that trade through the Suez Canal has dropped 40% over the past year as Egypt looks to expand two-way traffic through the channel.


Wed 15 Jan 25

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The Suez Canal is bleeding money with large volumes of “bunching” at ports and terminals as the Red Sea crisis—now stretching beyond 450 days—continues to wreak havoc on the global supply of timber. That is according to Abdel Fattah al-Sisis, Egypt’s President, who claims that the blockage caused year-over-year revenue in the Egyptian-controlled canal to nosedive by 60% last year— or more than US $7 billion.

It comes as Egpyt is looking to expand the canal’s width from 72km to 82km following a successful two-way trial late last month. Once implemented, it will expand the Suez Canal and prevent a repeat of the disastrous Ever Given grounding, which in 2021 brought the busy thoroughfare to a standstill. According to the Suez Canal Authority, the body responsible for managing traffic through the canal, the expansion will “boost the channel’s capacity by as many as eight ships a day, enhancing its ability to handle (future) potential emergencies.

In October, Wood Central  “vessel bunching” —defined as the number of sailings in a given week exceeding scheduled services—is skyrocketing, with the busy Northern Europe and Asian routes responsible for more than 70% of the trade in bulk timber products, amongst the most impacted by congestion.

“While the offered capacity may be the same over two weeks, i.e., no vessel sailing in one week followed by two vessels sailing the next week, having two vessels depart in one week and zero vessels in the second week results in an extraordinarily high workload in one week and none in the second week,” according to Alan Murphy, CEO of Sea-Intelligence.

“This increases the risk of port congestion – and as a ripple effect, a similar crunch on truck, rail, and barge capacity use. Vessel bunching can, therefore, be seen as a proxy measure for the pressure on ports and the corresponding likelihood of congestion problems,” he said.

Asia NEUR
“Vessel bunching” has surged since the beginning of the Red Sea Crisis – in November 2023 – rivalling the chaos in global shipping caused by the COVID-19 pandemic. (Photo Credit: Sea Intelligence)

As one of the most traded products on earth, more than US $188 billion worth of timber products are traded from country to country and port to port, with a large portion of this ‘bulk trade’ occurring on open waters. As a result, the global supply chain for timber products—used to build some of the largest buildings in the world—is highly vulnerable to geopolitical turmoil along the shipping network. According to the World’s Top Exports, the crisis has impacted the US by up to $50.8 billion of sawn wood, with China among the most affected. The big six—including China, Canada, Russia, Sweden, Germany, and the US—are responsible for over 70% of exported timber that widely uses the seaway; however, the impacts are being felt wider, with Australian-bound timber tied up in the bottleneck.

Author

  • Jason Ross

    Jason Ross, publisher, is a 15-year professional in building and construction, connecting with more than 400 specifiers. A Gottstein Fellowship recipient, he is passionate about growing the market for wood-based information. Jason is Wood Central's in-house emcee and is available for corporate host and MC services.

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