Can a single ship disrupt global trade?

 A cargo container vessel mv.”Ever Given” with its “bulbous bow” stuck in the sand-bar at the port side of the narrow Suez Canal near the beginning of the Sinai Peninsula blocking all passage of ships navigating this international waterway since 07.45 hours local time on Tuesday 23 March 2021, is more than a shipping disaster. 

It has put global shipping already strained by the pandemic further in dire strait,as at least 156 or more vessels needing to pass through this crucial waterway in convoy are having to idle and waiting for the obstruction to clear, whilst more are anchored outside both ends of the Canal.

The vessel the size of four football fields, with a length (LOA) of nearly 400 metres and a width (Beam) of 59 metres, is near about the maximum size of vessels allowed into this Canal. We are told due to high winds the vessel turned sideways in the Canal in its route northwards to the Mediterranean and bound for Rotterdam. 

We are also told that any vessel this size has to be maneuvered by two Canal Pilots from the Egyptian Canal Authority on board, but the Captain of the vessel retains ultimate authority for its navigation. 

The bow stem (front end) of the vessel “Ever Given” touched the eastern wall while its stern (back end) seemed nearly lodged against its western wall of the Canal, near the city of Suez, in an almost incredible and nightmare manner. 

Efforts over the last few days to free the ship using dredgers digging the silt from the bank of the Canal and the aid of tugs assisted by high tides, to push the stranded vessel into the main artery of the Canal, have all seem to have failed. 

The Canal is blocked some 6 kilometres north of the southern mouth of the Suez Canal near the City of Suez.

The history of the Container vessel  

mv.”Ever Given” owned by the Japanese owners, Shoei Kissen KK, flying the Panamian flag was built in 2018, can carry up to 20,000 containers (TEU’s) at a time and on this voyage had        boxes on board. 

The Japanese owners have apologised for this incident, which is maintained as an accident or “Act of God”. But the question in the minds of Average Adjusters and Insurance Brokers, and particularly, according to Marcus Baker, of Marine and Cargo broker, Marsh  is that this one accident could result in heavy insurance claims. It is estimated to cover between US$100 and $200 million.

According to Bloomberg Analysis,each day the stalemate continues,it holds up goods worth US$ 9.6 billion.

Was the "Ever Given" part of a bigger picture?

We also are told that this is not the first time that the same vessel was involved in an accident. In early 2019 this Container vessel ran into a small ferry moored in the Elbe river in the Port of Hamburg, Germany, which caused serious damage to the boat, but the claim was abandoned for lack of evidence.

What of the outcome now? 

An Egyptian official has stated that the vessel will “somehow” be freed over this weekend “27 /28 March 2021” using the prevailing high tides expected and dredging the bow of the vessel from the bank. 

Some cautious shipping sources/observers cannot exclude it might take at least a week or more depending on the situation, according to Reuters.

Should this happen shipping could potentially start rerouting around the Cape of Good Hope,the southern tip of South Africa which will add thousands of miles and about an extra week of journey time, and no doubt added costs. 

That a single ship can disrupt global trade affecting supply chains of the entire world is beyond belief and a calamity that could have not been envisaged.

Pessimists have maintained that there is “no way” the Egyptians are going to literally pull it off with tugs thus freeing the vessel and the Canal.

It is highly likely that cargo Containers on board may have to be offloaded from the vessel in an effort to release the stuck vessel in the Canal.

Mitigation still possible

In 2015 thanks to the forsight of the Egyptian President, Abdel Fattah-El-Sisi and the Canal Authorities,the Suez Canal received an upgrade when a newer and deeper Channel was built alongside the originally opened Canal in 1869.

According to Prof. Rooky Weitz of the Fletcher Maritime Studies at Tufts University,Alabama,USA, the old Channel can provide partial relief to the current blockage of the new Channel. Ships held up have been diverted to the old Channel to provide some assistance to the current blockage. But the Old Channel is much smaller so large vessels will need to wait at anchor outside both ends of the Canal until the main Channel is reopened.

We are informed that Convoys and traffic in both directions are expected to resume as soon as the "Ever Given" is towed to another position.

What we might have to endure in the not too distant future is that Egypt will enforce strict guidelines for the “max size” vessels that will be allowed to navigate the newer Channel of the Canal.

How has the Container revolutionised global trade?

Since the deployment of the Container ship in the 1950's, it has revolutionised global trade.As the standard size recepticle that can be quickly be transformed intermodal, from rail to truck,it has sharply reduced the time needed to move goods from manufacturing site to consumer, from one place to another. Rather than stockpiling extra goods in warehouses, business now since the pandemic depend on the "magic of the internet" and global supply chain to "summon what they need as they need it". It has expanded the availability of consumer goods and lowered prices.

But the same advances have yielded many uncertainties and vulnerabilities. The surge of orders on the internet since the pandemic has exhausted the supply of containers. The cost of shipping containers has more than doubled in the past year.

Innovative ways of global trade is now the way forward.

Victor Cherubim