Danger in the Suez

It is, to say the least, one of the more disturbing images in recent ocean shipping memory: A Cosco container ship, transiting one of the world’s most important shipping arteries, when first one, then another rocket-propelled grenade is launched at the exposed vessel.

The shaky video of the Suez Canal attack uploaded to YouTube this month, generally regarded as authentic, serves as the latest reminder of the vulnerability of ocean shipping, indeed to transportation, despite the multinational efforts to secure international commerce in the 12 years since the September 11 attacks.

That an attack — that much has been confirmed, even if the scope and manner haven’t — occurred in the Suez Canal should be all the more chilling to supply chain interests, even if an attack itself shouldn’t come as much of a surprise considering the violence sweeping the Middle East, and Egypt, in particular.

If this were an isolated incident, perhaps the industry could afford a subdued response. The attack, after all, failed to damage the ship or its cargo seriously. But was it isolated? In July, the Egyptian army said it had investigated reports of an explosion near the canal, but found no evidence.

“The transit of vessels through Suez has long been a concern to many,” David Welch, managing director of bomb disposal and counterterrorism specialist Ramora UK, told Reuters this month. “The proximity of land throughout much of the transit makes it an attractive target. Imagine the chaos if they (terrorists) managed to disable or sink a large vessel across the canal.”

How big is the risk? Some 17,000 ships passed through the canal last year, and its annual tonnage, including the world’s largest container ships, has nearly doubled over the past 12 years. As John Higginbotham, senior fellow at Ottawa’s Carleton University, wrote this month in a JOC commentary, the canal is critical, in large part because it provides a key energy link between the Persian Gulf and western Europe. “It has been closed by wars in the past, but the impact of closure now would be much greater because of the growth in global trade and maritime supply chains over the last few decades,” Higginbotham wrote.

For North America, other shipping options — the Panama Canal and the route around the Cape of Good Hope — reduce the risk of disruption, but both present their own challenges, the former with limitations on mega-ships until new locks are operational in 2015, the latter with much longer transit times that would wreak havoc on global carriers’ slow-steaming strategies. P&I insurers already are reviewing the Cosco attack, according to the same Reuters report, and war-risk surcharges have been imposed for far less.

And that’s not to mention what Higginbotham says would be the macroeconomic aftershocks from the European Union and Asia that would result from a Suez Canal shutdown.

So what’s an ocean carrier or supply chain manager to do? As you’ve done in the 12 years since the September 11 attacks: hope for the best, but prepare for the worst — and always be on guard.

Because in an ironic twist, for all the efforts that have gone into securing what’s aboard a ship, the latest terror concern is an attack targeting the ship itself.

For the full story: Log In, Register for Free or Subscribe