Explosion of Container Ship in Dubai Shakes Already Unstable Logistics Chain

A massive explosion and the subsequent fire shook the residents of Dubai on Wednesday evening. A container on a ship in the Jebel Ali port, which contained hazardous, flammable cargo, exploded and caught fire. Although no one was injured, the sound of the explosion was heard throughout the city, even 22 kilometers away from the port.

Jebel Ali is the ninth largest port in the world and the largest in the United Arab Emirates, while Dubai is the largest commercial center in the entire Middle East. While the investigation into the exact cause of the powerful explosion is ongoing, Dubai’s media office director, Mona Al Marri, stated that port authorities have taken all necessary measures to ensure the normal movement of vessels in the port without any disruptions.

As commented by Marin Škufca, director of Liburnia Maritime Agency, every such and smaller disruption can create additional instability in an already completely disrupted logistics chain, which then adversely affects production systems on land.

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Marin Škufca

photo Dražen Lapić

— The shipping logistics chain is completely disrupted. There is a significant shortage of shipping space globally, and delays and work stoppages are occurring in ports. This is a situation where there were no human casualties, and knowing the efficiency of the United Arab Emirates, it will not significantly affect the delays of other vessels, but generally, given that instability, I believe that every disruption can create additional instability and distrust – said Škufca, adding that despite the fire being brought under control, a lot of cargo is surely damaged.

In addition to the coronavirus pandemic, which disrupted global trade and thus shipping supply chains, there is also a shortage of containers, which has caused shipping rates to skyrocket.

– The freight market has reached a historic high. A container ship from Asia to Europe could be contracted for $8,000 to $10,000 a day a few years ago, and today those prices are $100,000 a day. When significant delays occur, no one takes responsibility for them, and then the entire supply chain is disrupted. Recipients have difficulty receiving goods, and consequently, production systems on land suffer – explained Škufca, concluding that no negative event in such an unstable current situation can help; it can only hinder.

Recently, news also echoed around the world about the massive backlog caused by the Ever Given ship in the Suez Canal. Although the ship has been freed and the canal reopened, ships are still delayed by a week to two days. As a result, the return journeys of those ships are also delayed, and losses due to delays are accumulating in the billions.

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