Suez Canal Crisis Affects the Car Industry

The U.S. market is about to have some major shortages affecting the market, due to the massive cargo ship that got lodged in the Suez Canal. This major error has already caused a week delay for the entire global shipping industry.

While there is currently a great debate going on about whether it was due to human error or technical error, there is one thing for certain. This error is majorly affecting the auto industry, which depends heavily on using the canal for transportation of raw materials, parts, and even finished vehicles. In Europe, their Car Dealer magazine reported that at least two large vehicle transportation ships were blocked by the grounding of the Ever Given, the ship lodged in the canal. It’s also being reported that several other ships heading towards the Suez Canal may be forced to anchor if the crisis isn’t resolved. Taking the long way around Africa adds about 10 days to a typical freighter’s time at sea.

For the United States, the government is closely monitoring the situation and even offered aid to the Egyptian government. The main priority of the U.S. is monitoring the rising price of oil, and now with this delay, the auto industry is very vulnerable. With closures from the coronavirus pandemic, inventories are at the lowest levels they’ve ever been at. It is estimated that there are 1 million less vehicles on the dealer lots this year, compared to the past. Manufacturers have been struggling to rebuild inventories with all of the recent challenges faced.

As the government works to move the ship, many say that they are not shocked if the error was due to the crew, and not technical issues. Human error accounts for anywhere between 75% and 96% of maritime accidents. Meanwhile, According to a Stanford Law School report, at least 90% of all motor vehicle crashes are caused fully or in part by human error. The exact percentage is still debatable and can be as high as 99%.

While it isn’t very likely you’re going to find yourself driving a giant cargo vessel in the Suez Canal, there’s a great chance at getting in an accident while driving your car every single day. Distracted driving is the leading cause of all car accidents, followed by speeding and drunk driving.

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