Causal Inference in Supply Chain Management: How Does Ever Given Accident at the Suez Canal Affect the Prices of Shipping Containers?

Abstract

In March 2021, the Ever Given, a colossal 4000-meter-long container ship with a capacity of 20,000 TEUs (Twenty-foot equivalent units), became lodged in the Suez Canal for six days, causing a significant disruption. This accident blocked approximately 400 ships, impacting not only the vessel itself and the canal but also global trade and the already strained global supply chain post-pandemic. Our research leverages causal inference techniques to rigorously assess and quantify the causal effects of the Ever Given accident on the World Container Index (WCI). We conducted experiments using time series data from eight major global shipping routes, achieving statistically significant results with a confidence level of 99.89%. This research conclusively demonstrates that the Ever Given incident at the Suez Canal had a substantial impact on shipping container prices, quantifying the effect as a remarkable 40% price increase post-exposure. By offering companies the ability to apply causal inference in understanding cause-and-effect dynamics within their supply chain networks, this study equips them with the knowledge needed to make well-informed decisions, especially in times of disruption, thus facilitating the optimization of their supply chain configuration and operations.