Tag Archives: Suez Canal

Expect higher prices: 45% of freight being detoured around the Horn of Africa

Suez-Canal-Ship

Important Takeaways:

  • Freight through Suez Canal sinks 45% amid Houthi attacks
  • About 39% fewer ships have passed through the canal than at the start of December, leading to a 45% decline in freight tonnage
  • UNCTAD, the United Nations Conference on Trade and Development, which supports developing countries in global trade, says that 39% fewer ships than at the start of December transited the canal, leading to a 45% decline in freight tonnage.
  • Container shipments through the canal tumbled 82% in the week to January 19 from early December, while for liquified natural gas (LNG), the decline was even greater. The drop-off for dry bulk was smaller, and crude oil tanker traffic was very slightly higher, the agency said, according to Reuters.
  • The Suez Canal is a critical shipping lane, given that it offers vessels a direct route between the North Atlantic and northern Indian oceans via the Mediterranean Sea and the Red Sea.
  • About 15% of world shipping traffic, including 30% of global container trade, passes through the Suez Canal. But to avoid being attacked or having their cargo stolen, many ships are instead sailing around the Cape of Good Hope, which is a much longer way around the continent of Africa.

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Traffic diverted in Suez Canal due to Container Ship running into bridge

Tanker-stuck-Suez-Canal

Important Takeaways:

  • A container ship collided with a floating bridge in the eastern lane of the Suez Canal on Wednesday but the passage of ships through the waterway would not be interrupted, the Suez Canal Authority (SCA) said.
  • Tugboats were working to tow the One Orpheus, which suffered a fault with its rudder while transiting the canal on its way from Singapore to the Netherlands, the authority said in a statement.
  • The incident occurred in the eastern lane of the middle section of the canal, built as an expansion that was completed in 2015.
  • Convoys of ships coming from the south were being diverted along the original branch of the canal, the canal authority said.
  • The Suez Canal is one of the world’s most heavily used shipping lanes and an important source of foreign currency for Egypt.
  • Works are currently underway to expand the southern, single-lane section of the canal, after a giant container ship ran aground there in 2021, blocking traffic through the waterway for six days.

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Egyptian court rejects appeal against detention of ship in Suez Canal

CAIRO (Reuters) – An Egyptian court on Tuesday ruled that the container ship which blocked the Suez Canal in March could continue to be held in the waterway, rejecting an appeal by its Japanese owner against its detention, a judicial source said.

The Ever Given, one of the world’s largest container ships, got jammed across the canal on March 23 and remained stuck for six days, stopping traffic in both directions.

It has been held in a lake between two stretches of the canal since being dislodged on March 29, amid a dispute over a $916 million claim by the Suez Canal Authority (SCA) against Japanese owner Shoei Kisen for compensation over the incident.

The SCA has been conducting investigations into the cause of the ship’s grounding, but has yet to announce the results.

The court in the Suez Canal city of Ismailia, which had approved the detention of the ship following the submission of a report by the SCA, upheld that decision on Tuesday, rejecting an appeal made late last month.

The reasoning for the ruling was not immediately clear, but the SCA argued that the plaintiff had not notified all the required parties of its challenge to the ship’s detention within the required time limit.

The ship’s protection and indemnity insurer, UK Club, said the owners were reviewing their options in light of the decision, and had until May 20 to appeal.

UK Club and the Ever Given’s technical manager Bernhard Schulte Shipmanagement (BSM) have expressed disappointment at the ship’s detention.

UK Club said last month the appeal was made “on several grounds, including the validity of the arrest obtained in respect of the cargo and the lack of supporting evidence for the SCA’s very significant claim”.

International supply chains were thrown into disarray when the 400-metre (430-yard) Ever Given ran aground in the canal, with 18,300 containers on board.

(Reporting by Yusri Mohamed; additional reporting by Jonathan Saul; Writing by Aidan Lewis; Editing by Mark Heinrich and Giles Elgood)

Dislodged ship held in Suez Canal as talks continue over $916 million claim

By Yusri Mohamed and Jonathan Saul

CAIRO (Reuters) -A ship that blocked the Suez Canal for almost a week in March is being held in the waterway as canal authorities pursue a $916 million compensation claim against the ship’s Japanese owner, one of the vessel’s insurers and canal sources said on Tuesday.

The Ever Given container ship, owned by Shoei Kisen, has been in a lake separating two sections of the canal since it was dislodged on March 29, as the Suez Canal Authority (SCA) conducts investigations.

Two SCA sources, who declined to be named, told Reuters a court order had been issued for the ship to be held. Negotiations over the compensation claim were still taking place, according to one of the sources.

UK Club, the protection & indemnity (P&I) insurer for the Ever Given, said the canal’s claim included $300 million for a “salvage bonus” and $300 million for “loss of reputation”.

“Despite the magnitude of the claim, which was largely unsupported, the owners and their insurers have been negotiating in good faith with the SCA,” UK Club said in a statement.

“On 12 April, a carefully considered and generous offer was made to the SCA to settle their claim. We are disappointed by the SCA’s subsequent decision to arrest the vessel today.”

Yumi Shinohara, deputy manager with owner Shoei Kisen’s fleet management department, confirmed earlier on Tuesday that the canal had made a compensation claim and that the ship had not been given clearance to leave, but gave no further details.

There was no immediate comment from the SCA, but the authority’s chairman Osama Rabie said on Egyptian TV last week that the Ever Given would not leave until the investigation was finished and compensation paid.

He said the canal had borne “great moral damage” as well as shipping fee losses and salvage operation costs. He has also said he hoped to settle matters amicably.

Results of the SCA’s investigation were expected to be announced by the end of the week, according to SCA sources.

International supply chains were thrown into disarray when the 400 meter (430 yard) Ever Given ran aground in the canal on March 23.

Specialist rescue teams took six days to free the vessel, delaying the passage of more than 400 ships and causing others to divert around Africa.

Industry sources told Reuters last week that reinsurers were set to foot most of the bill for the ship’s grounding, with payouts expected to run into hundreds of millions of dollars.

Ships typically have P&I insurance, which covers third party liability claims including environmental damage and injury. Separate hull and machinery policies cover vessels against physical damage.

One maritime lawyer said that normally the ship owner would pay an agreed security that would allow the vessel and crew to continue on their way with a court setting a final award later.

“Of course in this case, they are hoping for cash now,” he said.

(Reporting by Yusri Mohamed in Ismailia, Yuka Obayashi in Tokyo, Jonathan Saul and Kirstin Ridley in London; Writing by Aidan Lewis; Editing by Jane Merriman and Mark Potter)

Suez Canal may expand southern channel, chairman says

By Nadeen Ebrahim and Patrick Werr

ISMAILIA, Egypt (Reuters) -The Suez Canal Authority is considering expanding the southern section of the waterway where the container ship Ever Given became stranded, its chairman said on Tuesday.

It is also looking into procuring cranes that could potentially offload cargo at heights of up to 52 meters, Osama Rabie told Reuters in an interview.

“Our procedures are sound, we are just aiming to improve the service,” he said.

The 400-metre-long (1,310 ft) Ever Given became grounded diagonally across the southern section of the canal during high winds on March 23. It remained stuck for six days, preventing hundreds of ships from passing and significantly impacting global trade flows.

After it was dislodged, the ship was taken to a lake that separates two sections of the canal where the Suez Canal Authority (SCA) has been conducting investigations.

Rabie said data from the ship’s recorders had been removed and handed over to an investigation committee, and that the ship would travel on once the procedures were completed.

“We are talking about two or three more days, God willing. But we won’t take much time,” he said.

The committee investigating the grounding was made up of five or six members with law, maritime, salvage, and administration expertise, he said, adding that it had caused Egypt great damage.

“We used about 15 tug boats, for six days. We worked 24 hours a day. We used two dredgers. We used assistance launches,” Rabie said. “The canal was closed for six days. That alone caused great harm.”

The SCA has said that it will continue to take ships of the Ever Given’s size and is reinforcing its ability to deal with future problems.

“We will try to get two more tug boats, with pulling power of more than 200 tonnes – 250, 280, depending,” Rabie said.

The authority was also studying and planning a possible expansion of the southern part of the canal, the area where the Ever Given got stuck.

“If there is a 250-metre part that needs expansion, maybe we will make it 400 meters,” Rabie said.

(Reporting by Nadeen Ebrahim and Patrick Werr in Ismailia, additional reporting by Mahmoud Mourad in Cairo; Writing by Nadine Awadalla and Aidan Lewis; Editing by John Stonestreet, Philippa Fletcher and Emelia Sithole-Matarise)

Suez Canal races to clear backlog as shipping convoys resume

By Nadeen Ebrahim

ISMAILIA, Egypt (Reuters) – The Suez Canal expects 140 ships to pass on Tuesday after the freeing of a container ship stranded for nearly a week allowed it to reopen, but disruptions to global shipping and at ports could take months to resolve, experts warned.

The blockage threw global supply chains into disarray, threatening costly delays for firms already wrestling with COVID-19 restrictions, and nearly doubled rates for oil product tankers.

Shipping convoys through the canal resumed on Monday evening after tugs pulled the 400-metre-long (430-yard) Ever Given container carrier free from the spot where it became wedged amid high winds on March 23.

The Ever Given’s grounding across a southern section of the canal forced a halt to all traffic, leading to a build-up of 422 ships at either end of the canal and along its course.

Suez Canal Authority chairman Osama Rabie said 95 ships would pass by 1900 local time (1700 GMT) on Tuesday and a further 45 by midnight, reasserting that he hoped a backlog caused by the blockage would be cleared in three to four days.

However, knock-on effects to global shipping and at ports could take much longer to resolve.

Though the build-up around the Suez Canal might be cleared in four to five days, it could take several months to deal with backlogs at ports, Jan Hoffmann, an UNCTAD expert on logistics, told a briefing.

Egyptian President Abdel Fattah al-Sisi said the Ever Given’s grounding had drawn attention to the importance of the waterway for global trade.

“We didn’t hope for something like this, but fate was doing its work. It showed and reaffirmed the reality and importance” of the canal, Sisi said as he greeted staff on a visit to the Suez Canal Authority in Ismailia.

“We want to reaffirm in a clear message to the world that everything is back to the way it was,” he later told reporters from a platform on the canal, as container ships passed behind him.

Shipping group Maersk has said the knock-on disruptions to international shipping could take weeks or months to unravel.

Rabie has said the SCA will look at giving discounts to shippers affected by the stoppage.

“We need to study it in the right way because the number of ships is large, including ships that waited for one day, ships that waited for two days, and ships that waited for three days or four days — not all of them will take the same percentages,” he told a press conference late on Monday.

The Japanese owner of the Ever Given said it had not received any claims or lawsuits over the blockage.

(Reporting by Mahmoud Mourad, Nadine Awadalla and Omar Fahmy; Writing by Aidan Lewis; Editing by Louise Heavens, William Maclean, Alexandra Hudson)

Traffic in Suez Canal resumes after stranded ship refloated

By Yusri Mohamed, Nadine Awadalla and Aidan Lewis

ISMAILIA, Egypt (Reuters) – Shipping traffic through Egypt’s Suez Canal resumed on Monday after a giant container ship which had been blocking the busy waterway for almost a week was refloated, the canal authority said.

The 400-metre (430-yard) long Ever Given became jammed diagonally across a southern section of the canal in high winds early last Tuesday, halting traffic on the shortest shipping route between Europe and Asia.

Live footage on a local television station showed the ship surrounded by tug boats moving slowly in the center of the canal on Monday afternoon. The station, ExtraNews, said the ship was moving at a speed of 1.5 knots.

“Admiral Osama Rabie, the Chairman of the Suez Canal Authority (SCA), announces the resumption of maritime traffic in the Suez Canal after the Authority successfully rescues and floats the giant Panamanian container ship EVER GIVEN,” a statement from the SCA said.

“She’s free,” an official involved in the salvage operation said.

After dredging and excavation work over the weekend, rescue workers from the SCA and a team from Dutch firm Smit Salvage had succeeded in partially refloating the ship earlier on Monday using tug boats.

“The time pressure to complete this operation was evident and unprecedented,” said Peter Berdowski, CEO of Smit Salvage owner Boskalis after the Ever Given was refloated.

The company said approximately 30,000 cubic meters of sand was dredged to refloat the 224,000-ton container ship and a total of 11 tugs and two powerful sea tugs were used to pull the ship off.

Evergreen Line, which is leasing the Ever Given, confirmed the ship had been successfully refloated and said it would be repositioned in a lake that sits between two sections of the canal and inspected for seaworthiness.

Bernhard Schulte Shipmanagement (BSM), the technical managers of the container ship, said there were no reports of pollution or cargo damage, and initial reports ruled out any mechanical or engine failure as a cause of the grounding.

QUEUE

At least 369 vessels are waiting to transit the canal, including dozens of container ships, bulk carriers, oil tankers and liquefied natural gas (LNG) or liquefied petroleum gas (LPG) vessels, the SCA’s Rabie said.

The authority said earlier it would be able to accelerate convoys through the canal once the Ever Given was freed. “We will not waste one second,” Rabie told Egyptian state television.

He said it could take up to three days to clear the backlog, and a canal source said more than 100 ships would be able to enter the channel daily. Shipping group Maersk said the knock-on disruptions to global shipping could take weeks or months to unravel.

Egyptian President Abdel Fattah al-Sisi, who had not publicly commented on the blockage, said Egypt had ended the crisis and assured resumption of trade through the canal.

Oil prices were more than 1 percent lower at $63.85 a barrel after the ship was refloated. Shares of Taiwan-listed Evergreen Marine Corp – the vessel’s lessor – closed 1.75% higher after the ship was partially refloated earlier on Monday.

About 15% of world shipping traffic transits the Suez Canal, which is an important source of foreign currency revenue for Egypt. The stoppage was costing the canal $14-15 million a day.

Shipping rates for oil product tankers nearly doubled after the ship became stranded, and the blockage has disrupted global supply chains, threatening costly delays for companies already dealing with COVID-19 restrictions.

Maersk was among shippers rerouting cargoes around the Cape of Good Hope, adding up to two weeks to journeys and extra fuel costs.

(Reporting by Yusri Mohamed, Nadine Awadalla and Aidan Lewis; Additional reporting by Omar Fahmy, Momen Saeed Atallah and Mahmoud Mourad in Cairo, Florence Tan in Singapore, Anthony Deutsch and Bart Meijer in Amsterdam and Akshay Lodaya; Writing by Lincoln Feast and Kirsten Donovan; Editing by Richard Pullin, Timothy Heritage, William Maclean and Catherine Evans)

Suez Canal steps up efforts to remove blockage as shipping rates surge, tankers diverted away

By Florence Tan, Jessica Jaganathan, Roslan Khasawneh and Gavin Maguire

CAIRO (Reuters) – The Suez Canal stepped up efforts on Friday to free a giant stuck container ship and end a blockage that has sent shipping rates for fuel tankers soaring and disrupted global supply chains for everything from grains to baby clothes.

Shipping rates for oil product tankers have nearly doubled after the 400-metre (430-yard) long Ever Given ran aground in the vital trade waterway on Tuesday.

Efforts to free it may take weeks and be complicated by unstable weather conditions, threatening costly delays for companies already dealing with COVID-19 restrictions.

Shoei Kisen, Ever Given’s Japanese owner, denied a news report that it aimed to dislodge it by Saturday night, saying refloating efforts were ongoing.

The Suez Canal Authority (SCA) said efforts to free the ship by tug would resume as soon as dredging operations at its bow to remove 20,000 cubic meters of sand are complete.

“In addition to the dredgers already on site a specialized suction dredger is now with the vessel and will shortly begin work. This dredger can shift 2,000 cubic meters of material every hour,” said Bernhard Schulte Shipmanagement, the Ever Given’s technical manager.

The SCA said it welcomed a U.S. offer to help. Turkey also said it can send a vessel to the canal, amid a recent push by Ankara to repair ties with Egypt after years of animosity.

The suspension of traffic through the narrow channel that links Europe and Asia has deepened problems for shipping lines that were already facing coronavirus-related disruptions in supplying retail goods to consumers.

IMPACT ON OIL

About two dozen ships could be seen from the shores of Port Said on Friday morning, according to a Reuters witness.

Oil prices were up 2% at over $63 a barrel on Friday as more than a total of 30 oil tankers have been waiting on either side of the canal since Tuesday, shipping data on Refinitiv showed.

However, the delays come at a time of low seasonal demand for crude oil and liquefied natural gas (LNG), which will likely mitigate the impact on prices, analysts said.

Data intelligence firm Kpler said 10 crude oil tankers were awaiting entry to the canal. About 4 million barrels of mostly Kazakh CPC Blend and some Russian Urals were waiting along with tankers carrying Libyan, Azeri and some North Sea crude oil for Asian refiner, traders said.

Egypt’s SUMED pipeline operator quickly approached crude traders to see whether they wanted to book space in the system but so far, traders prefer to wait to avoid high additional costs.

Analysts expect a greater price impact on smaller tankers carrying oil products, like naphtha and fuel oil, for export from Europe to Asia, if the canal remains shut for weeks.

“Around 20% of Asia’s naphtha is supplied by the Mediterranean and Black Sea via the Suez Canal,” said Sri Paravaikkarasu, director for Asia oil at FGE, adding that re-routing ships around the Cape of Good Hope could add about two weeks and extra fuel costs to the voyage.

The blockage is weighing on the already weak Asian gasoil, or diesel, market. More than 60% of Asian exports to the west flowed via the choked Canal in 2020, according to FGE.

“Aframax and Suezmax rates in the Mediterranean have also reacted first as the market starts to price in fewer vessels being available in the region,” shipbroker Braemar ACM Shipbroking said.

At least four Long-Range 2 tankers that might have been headed towards Suez from the Atlantic basin are now likely to be evaluating a passage around the Cape of Good Hope, Braemar ACM said. Each LR-2 tanker can carry around 75,000 tonnes of oil.

The cost of shipping clean products, such as gasoline and diesel, from the Russian port of Tuapse on the Black Sea to southern France jumped 73% over the last three days to $2.58 a barrel on March 25, according to Refinitiv Eikon data.

The shipping index benchmark for LR2 vessels from the Middle East to Japan, known as TC1, has climbed by a third since last week to 137.5 worldscale points, said Anoop Jayaraj, clean tanker broker at Fearnleys Singapore. Worldscale is an industry tool used to calculate freight rates.

Similarly, the index for freight rates for Long-Range 1 (LR1) vessels on the same route, known as TC5, stood at 130 worldscale points on Friday, up from 125 at the end of last week.

On the LNG side, Kpler said 10 cargoes were held up, six of which are laden and several LNG tankers have been diverted, one Singapore-based shipbroker said.

If the blockage lasts for two weeks, about one million tonnes of LNG could be delayed for delivery to Europe, according to Rystad Energy, which could more than double in a worst-case scenario month-long closure. Some European buyers concerned about delays to Qatari LNG deliveries may consider buying in the spot market.

Meanwhile, oil traders told Reuters they are adopting a wait-and-see approach to see if a higher tide due on Sunday would help.

(Reporting by Florence Tan, Jessica Jaganathan, Gavin Maguire, Roslan Khasawneh, Koustav Samanta in Singapore and Nadine Awadalla in Cairo; Additional reporting by Gleb Gorodyankin, Olga Yagova in Moscow and Julia Payne in London; Editing by Simon Cameron-Moore, Christopher Cushing, Emelia Sithole-Matarise and Frances Kerry)

Ship blocking Suez Canal like ‘beached whale’ could be stuck for weeks

By Yusri Mohamed, Gavin Maguire and Florence Tan

ISMAILIA, Egypt (Reuters) – A container ship blocking the Suez Canal like a “beached whale” may take weeks to free, the salvage company said, as officials stopped all ships entering the channel on Thursday in a new setback for global trade.

The 400 m (430 yard) Ever Given, almost as long as the Empire State Building is high, is blocking transit in both directions through one of the world’s busiest shipping channels for oil and grain and other trade linking Asia and Europe.

The Suez Canal Authority (SCA) said eight tugs were working to move the vessel, which got stuck diagonally across the single-lane southern stretch of the canal on Tuesday morning amid high winds and a dust storm.

“We can’t exclude it might take weeks, depending on the situation,” Peter Berdowski, CEO of Dutch company Boskalis which is trying to free the ship, told the Dutch television program “Nieuwsuur”.

A total of 156 large container ships, tankers carrying oil and gas, and bulk vessels hauling grain have backed up at either end of the canal, Egypt’s Leith Agencies said, creating one of the worst shipping jams seen for years.

Three ships were being escorted out of the canal, it added.

The blockage comes on top of the disruption to world trade already caused in the past year by COVID-19, with trade volumes hit by high rates of ship cancellations, shortages of containers and slower handling speeds at ports.

The SCA, which had allowed some vessels to enter the canal in the hope the blockage could be cleared, said it had temporarily suspended all traffic on Thursday. Shipping giant Maersk said in a customer advisory it had seven vessels affected.

Berdowski said the ship’s bow and stern had been lifted up against either side of the canal.

“It is like an enormous beached whale. It’s an enormous weight on the sand. We might have to work with a combination of reducing the weight by removing containers, oil and water from the ship, tug boats and dredging of sand.”

A new attempt to move it would take place later on Thursday, the ship’s technical manager, Bernhard Schulte Shipmanagement (BSM), said.

Roughly 30% of the world’s shipping container volume transits through the 193 km (120 miles) Suez Canal daily, and about 12% of total global trade of all goods.

Shipping experts say that if the blockage is not cleared in the coming days, some shipping may re-route around Africa, which would add roughly a week to the journey.

“Every port in Western Europe is going to feel this,” Leon Willems, a spokesman for Rotterdam Port, Europe’s largest, said. “We hope for both companies and consumers that it will be resolved soon. When these ships do arrive in Europe, there will inevitably be longer waiting times.”

Consultancy Wood Mackenzie said the biggest impact was on container shipping, but there were also a total of 16 laden crude and product oil tankers due to sail through the canal and now delayed.

The tankers were carrying 870,000 tonnes of crude and 670,000 tonnes of clean oil products such as gasoline, naphtha and diesel, it said.

Russia and Saudi Arabia are the top two exporters of oil through the canal, while India and China are the main importers, oil analytics firm Vortexa said. Consultancy Kpler said the canal accounted for only 4.4% of total oil flows but a prolonged disruption would complicate flows of Russian and Caspian oil to Asia and oil from the Middle East into Europe.

Joanna Konings, senior economist, International Trade Analysis at Dutch bank ING, noted the container shipping industry was used to days of delays.

But Germany’s BDI industry association was concerned. Deputy Managing Director Holger Loesch said earlier delays were already impacting production, with industries depending on raw materials or construction supply deliveries particularly affected.

About 16% of Germany’s chemicals imports arrive by ship via the Suez canal and the chief economist for the association of German chemicals and pharmaceuticals producers VCI, Henrik Meincke, said they would be affected with every day of blockage.

Ever Given’s technical manager BSM said dredgers were working to clear sand and mud from around it while tugboats in conjunction with Ever Given’s winches work to shift it.

Japanese shipowner Shoei Kisen apologized for the incident and said work on freeing the ship, which was heading to Europe from China, “has been extremely difficult” and it was not clear when the vessel would float again.

The owner and insurers face claims totaling millions of dollars even if the ship is refloated quickly, industry sources said on Wednesday. Shoei Kisen said the hull insurer of the group is MS&AD Insurance Group while the liability insurer is UK P&I Club.

The ship’s GPS signal shows only minor changes to its position over the past 24 hours.

Two professional rescue teams from the Netherlands and Japan will work with local authorities to design a more effective plan to refloat the vessel, the company leasing it, Taiwan’s Evergreen Marine Corp said.

(Reporting by Yusri Mohamed in Isamilia, Gavin Maguire and Florence Tan and Roslan Khasawneh in Singapore; additional reporting by Bart Meijer in Amsterdam, Yuka Obayashi and Sakura Murakami in Tokyo, Mark John, Dmitry Zhdannikov, Julia Payne, Carolyn Cohn and Jonathan Saul in London, Anthony Deutsch in Amsterdam, Michael Hogan in Hamburg and Rene Wagner; editing by Robert Birsel, Aidan Lewis and Philippa Fletcher)

Tugs work to free giant container ship stranded in Suez Canal

By Yusri Mohamed, Jessica Jaganathan and Florence Tan

CAIRO (Reuters) – The shortest shipping route from Europe to Asia remained blocked on Wednesday as 10 tug boats struggled to free one of the world’s largest container ships after it ran aground in the Suez Canal.

The 400-metre, 224,000-tonne Ever Given ran aground on Tuesday morning after losing the ability to steer amid high winds and a dust storm, the Suez Canal Authority (SCA) said in a statement.

About 30% of global container shipping volumes pass through the canal each day, carrying everything from fuel to consumer goods. The main alternative route for ships travelling between Asia and Europe, around the African cape, takes a week longer to navigate.

GAC, a Dubai-based marine services company, said authorities were still working to free the ship mid-afternoon on Wednesday, and that information it had received earlier claiming the vessel was partially refloated was inaccurate.

Images posted by the SCA appeared to show the ship positioned diagonally across the canal, blocking its full width, as tugs tried to dislodge it. Photos showed a digger removing earth and rock from the bank of the canal around the ship’s bow.

An official said work to release the ship could continue into the night, weather permitting.

The SCA’s chairman told local media that despite the blockage, a southbound convoy was on the move and that the authority was trying to keep traffic flowing between waiting areas as best it could while salvage efforts continued.

“Once we get this boat out, then that’s it, things will go back to normal. God willing, we’ll be done today,” Chairman Osama Rabie said. The authority was considering compensation for delayed ships, he said.

About 12% of world trade by volume passes through the canal, and it is a major source of hard currency for Egypt, generating $5.6 billion in 2020.

Tracking maps had shown the ship grounded in the southernmost stretch of the waterway, between the Great Bitter Lake and the Red Sea port of Suez.

At least 30 ships were blocked to the north of the Ever Given, and three to the south, local sources said. Several dozen ships could also be seen grouped around the northern and southern entrances to the canal.

REBALANCING EFFORTS

The SCA said it was trying to rebalance the ship, and local sources said efforts could shift towards digging the ship out if the tug boats were unable to release it.

Dutch marine services company Boskalis said its subsidiary Smit Salvage had been hired to help with the operation and was sending 10 people to Egypt.

In such cases, “you really have to do the calculations to understand how solidly she (is) grounded, and how much power you can exert without damaging the vessel,” Boskalis spokesman Martijn Schuttevaer told Reuters.

Bernhard Schulte Shipmanagement (BSM), the ship’s technical manager, said the Ever Given had run aground in the canal at around 05:40 GMT on Tuesday. It said an investigation was underway.

BSM said the crew were safe and there were no reports of pollution. A BSM spokesperson said the vessel was owned by Japan’s Shoei Kisen KK, declining to provide further details. Shoei Kisen KK could not be reached for comment.

Taiwan’s Evergreen Marine Corp, which is leasing the vessel, said the owner had told it the ship “was suspected of being hit by a sudden strong wind, causing the hull to deviate from (the) waterway and accidentally hit the bottom”.

The ship is likely to have been insured for $100-140 million, insurance brokers say.

SUPPLY CONCERNS

Dozens of ships carrying crude, liquefied natural gas (LNG) and retail goods were unable to sail through the canal on Wednesday, potentially disrupting supplies to global markets, shipping sources said.

Oil analytics firm Vortexa said ten tankers carrying 13 million barrels of crude could be affected. Oil prices rose more than 2%. [O/R]

As of Wednesday, five laden LNG tankers were unable to pass through the canal due to the grounded container ship, according to data intelligence firm Kpler.

Of the five, three were bound for Asia and two for Europe, said Kpler analyst Rebecca Chia. She said that if the congestion persists until the end of this week, it would affect the transit of 15 LNG tankers.

During 2020, nearly 19,000 ships, or an average of 51.5 per day, passed through the canal, according to the SCA.

If the Ever Given remained stuck for up to 48 hours, “the impact will be limited to a gradual worsening of already very bad vessel delays”, said Niels Madsen, VP of Product and Operations at Denmark-based Sea-Intelligence.

“If on the other hand, the Suez Canal remains blocked for another 3-5 days, then this will start to have very serious global ramifications,” he said.

(Reporting by Yusri Mohamed in Ismailia, Egypt, and Jessica Jaganathan, Florence Tan, Roslan Khasawneh, Gavin Maguire and Koustav Samanta in Singapore, Yimou Lee in Taipei, and Yuka Obayashi in Tokyo; Additional reporting by Carolyn Cohn and Jonathan Saul in London, Mahmoud Mourad in Cairo, Anthony Deutsch in Amsterdam; Writing by Aidan Lewis; Editing by Tom Hogue, Jan Harvey and Mark Potter)