Shipments worldwide affected by Suez Canal Blockage

Ever Given, a large transportation vessel, has been moved from its position in the Suez Canal after grounding there nearly two weeks ago. 

When the ship first grounded, one end was forced against the outer edge of the canal, while the other end nearly reached the other side of the canal.

As a result of this blockage, no other ships were able to travel through the canal, meaning that many other ships would not be able to pass through the canal, either.

According to the Suez Canal Authority, approximately 51.5 ships passed through the Suez Canal each day, meaning that 19,000 ships passed through the Suez Canal in 2020.

In fact, when the Ever Given became wedged across the Suez Canal, more than 400 other ships were stranded in the Mediterranean and the Red Sea, with no way out in sight.

Osama Rabie, chairman of the SCA stated that 85 ships were expected to pass through the canal the day that the Ever Given grounded.

Lloyd’s List, a journal that provides weekly shipping news, estimated that the transportation of goods worth approximately $9 billion was disrupted as a result of the blockage.

Suez Canal Authorities also reported that there were 20 livestock ships stuck in the Suez Canal.

“We are sitting in front of a major tragedy,” said Gabriel Paul, a member of the Animals International Group.

Paul had predicted that if the channel did not open back up again within 24 hours of the initial shipwreck, the sheep on 13 Romanian vessels were at risk of dying as a direct effect of water and fodder loss.

“While it remains premature to assess the full impacts arising from the incident, our channel checks indicate within the near term, the blockage is likely to add industry supply stairs, which are already hampered by ongoing supply chain bottlenecks (port congestion and vessel / container shortages) caused by COVID-19 as liners reroute current voyages to alternative routes which will result in longer voyage times and causing further delays,” JP Morgan stated in a note addressed to clients.

When a ship is rerouted, the amount of time that it would take the ship to get to its final destination is increased, thus resulting in higher cost.

Because of this, most ships travel through the Suez Canal to get to Amsterdam, which is normally a 13-day trip, whereas traveling around the Cape of Good Hope, which is on the southern tip of Africa, can lead to a trip as long as 41 days.

Soon after the ship had been dislodged, the local officials began an investigation to determine what caused the ship to turn sideways.

While those on the ship were under the belief that the weather had an impact, others believe that it was because of the ship’s captain, Marwa Elselehdar, Egypt’s first-ever female captain.

“I tried so hard to negate what was in the article because it was affecting my reputation and all the efforts I exerted to be where I am now,” Elselehdar said.

Along with Elselehdar, blame was also placed on a German multinational shipping company Bernhard Schulte Shipmanagement, who were responsible for providing the planning and management of the Ever Given.

In response to these rumors, BSM commented that the initial investigation, “suggest(s) the vessel grounded due to strong wind,” and ruled out the possibility that the ship had been grounded as a result of mechanical or engine failure.

Despite BSM’s belief that the wreck had nothing to do with the technical or mechanical errors, they stated that the ship’s crew was cooperating with the authorities in the investigation.

If both parties, the crew of the Ever Given and the SCA, agreed on a compensation amount, so that the SCA can recover from the financial loss that occurred as a result of the 6-day blockage, while also covering the expenses of the tugboats and dredgers that were used to salvage the Ever Given and its cargo. Once the compensation amount was agreed on, the Ever Given would be able to travel on.

However, if the issue of compensation involved a lawsuit, then the Ever Given and the $3.5 billion worth of goods would not be able to leave the country.

Since the Ever Given is owned by a Japanese company, but is operated by a Taiwanese shipper and flagged in Panama, the litigation would be a complex process.

“We are appointing an investigation who is precisely going to prepare a report to be able to understand for certain what were the events surrounding this stranding of the Ever Given vessel in the Suez Canal,” stated the head of the Directorate General of Merchant Marine in Brazil in response to the investigation

Despite an ongoing investigation, the travel through the Suez Canal is back to normal and shipments are no longer delayed.