#LOGISTICS
The Suez Canal Needs a Laxative
It couldn't be in a worse spot
The Suez Canal, which connects the Red Sea and the Mediterranean through Egypt, is the carotid artery of the global shipping system. Around 10% of worldwide shipping traffic flows through its narrow waters, including roughly 5% of globally traded crude oil. In 2019, nearly 19,000 ships transporting 1.2 billion tons of cargo passed through the canal, generating $5.6 billion in revenue for Egypt last year. Only the Panama Canal has a similar amount of traffic.
The Ever Given's ill-timed perpendicular park job is acting like a Wendy's Baconator to global trade's circulatory system, creating massive traffic snarls on either side.
As of last night, over 100 ships were stuck at each end of the 120-mile canal, putting even more pressure on the global shipping industry that was already out of whack from the pandemic.
No one is shocked this happened
Modern container ships like the Ever Given are so massive that global ports and canals have struggled to accommodate them. The Suez Canal is only around 300 feet wide at most points, which makes piloting a huge ship through it tougher than unlocking your apartment door after six White Claws. When a massive ocean liner got stuck near a German port in 2016, it took 12 tugboats and almost a week to free it.
Bottom line: Shipping companies usually factor in extra days to their schedules to account for any unexpected delays. But if the Ever Given clogs the canal for longer than that, prices of stranded cargo, from crude oil to consumer goods, could be affected.
TOBY HOWELL
#STARTUP
Sponsors, Investors Distance Themselves from David Dobrik
David Dobrik, YouTube star and cofounder of photo sharing app Dispo, is getting dropped by sponsors and investors over accusations of sexual harassment and assault directed at his "Vlog Squad." The timeline:
Last Tuesday, Business Insider published an investigation into the Vlog Squad that involved accusations of misconduct and exploitation, and an accusation of rape against one member (no charges have been filed).
Soon after, Dobrik sponsors including HelloFresh, DoorDash, and Dollar Shave Club pulled their support.
On Sunday, Dobrik said he would leave Dispo and step down from the board. Later that night, Spark Capital, a successful venture capital firm that led Dispo's Series A, said it would "sever all ties" with the company, which reached a $200 million valuation in its latest round.
Seven Seven Six, another investor, said it would donate any profits made from Dispo to organizations supporting survivors of sexual assault.
Bottom line: The episode is prompting reflection over 1) investments in high-flying influencers and 2) blind spots in the male-dominated VC-startup ecosystem.
ELIZA CARTER
#TRAVEL
Gas Prices Could Pass $3 Per Gallon
Whose fault is it, anyway? Gas prices always tend to rise leading up to the summer, but the 2021 jump can be attributed to two biggies: 1) large, pent-up demand to drive through the mountains listening to Lana's new album and 2) oil refiners not yet refining at full speed. Last month's historic freeze in Texas, the nation's largest natural gas producer, set production back bigtime.
What's next? Many Americans are still working from home without lengthy commutes, but a slew of cross-country road trips could help send gas prices even higher. Analysts think average prices could soon rise above $3.
One group that’s not complaining: oil and gas companies. Energy is the best-performing S&P sector so far this year.
MATTI MERRITT
#GRAB-BAG
Key Performance Indicators
Stat: 12 individuals or organizations are responsible for up to 65% of all anti-vaccine content circulating on major social media platforms, per the Center for Countering Digital Hate. Today, Facebook CEO Mark Zuckerberg and his counterparts at Google and Twitter will testify before Congress about the spread of online misinformation.
Quote: "When the party is going strong, it's the job of the regulators to take away the punchbowl."
Sen. Elizabeth Warren jousted with Treasury Secretary Janet Yellen yesterday about oversight of BlackRock, the world's largest asset manager. Warren was wondering why the Biden administration hasn't put more scrutiny on BlackRock, which manages 180x more assets than banks deemed "too big to fail" post-financial crisis.
Read: How the New York Times A/B tests their headlines. (TJCX)
NEAL FREYMAN
