The Suez Canal saga continues. After it spent six days blocking the crucial waterway, the Ever Given is now being held by the Suez Canal Authority, which demands it must be paid $916 million for the obstruction. An Egyptian court has ruled that the SCA has a right to arrest the vessel until it's paid.
The Suez Canal is one of the world's most important waterways. Located 75 miles east of Cairo, the capital of Egypt, it links the Mediterranean Sea to the Red Sea, allowing for direct shipping from Europe to Asia. Roughly 12% of the world's shipping traffic and a chunk of its oil supply goes through the manmade canal, which has become particularly vital following disruptions to shipping.
That's why it was a big deal that a 1,312-foot-long ship, the Ever Given, blocked the Suez Canal for six days, from March 23 to 29. With the canal's cargo traffic at a standstill, that meant delays in everything from oil to food to clothing to semiconductors.
After a tense six days, Egyptian TV footage triumphantly showed the ship aligned in a straight position along the canal as a set of tugboats successfully refloated the vessel in the early hours fo March 29.
Why is the Ever Given impounded?
You can't just block an international-trade bottleneck for nearly a week and expect no consequences! Egypt's Suez Canal Authority says it's owed $916 million for the obstruction. The SCA says that sum helps cover the revenue lost during the canal blockage, the cost of the rescue mission and a fee for the damage sustained by the canal's embankments when the ship became lodged in them, reports the state-controlled Ahram Gate publication.
The Ever Given has been anchored in a lake that separates two lanes of the Suez Canal since March 29, when it was refloated, reports Reuters. A court order to officially impound the Ever Given was issued on Monday.
"The vessel will remain here until investigations are complete and compensation is paid," Osama Rabie, chairman of the SCA, said on Egyptian state television last week. "The minute they agree to compensation, the vessel will be allowed to move."
There is some confusion about who will pay that cost. The Ever Given is owned by Japanese company Shoei Kisen Kaisha, leased by the Taiwanese Evergreen Marine Corporation and operated by the German Bernhard Schulte Shipmanagement. Shoei Kisen Kaisha is in negotiations with the SCA about the fee, reports The Wall Street Journal.
UK Club, the insurer for the Ever Given, told Reuters it made a "generous" compensation offer to the SCA on Monday. It says the SCA rejected the order before officially arresting the Ever Given on Tuesday. It adds that of the $900 million the SCA is demanding, $300 million is for "loss of reputation."
The Suez Canal is both a major source of revenue and national pride for Egypt. It was built in the 19th century, and until Egypt's independence, it was owned by the Ottomon Empire but operated by a mostly French and British-owned company. When Egypt's president nationalized the Canal after independence, it led to the Suez Canal crisis. While Egypt was at war with an invading Israel, Britain and France sent troops to the Canal, blocked it and sank dozens of ships. British and French forces then retreated after condemnation from the US and USSR, seen as a key moment in the post-imperial world order. In 2014, the Egyptian government spent $9 billion to expand the Suez Canal, extending its width so that twice the amount of ships could pass through, in the hopes that it would drastically boost revenue.
How was the ship refloated?
The Ever Given was lodged firmly in the embankments on each side of the Suez Canal. After six days of rigorous efforts, the ship was refloated on March 28, according to shipping services company Inchcape, and fully freed on the March 29.
"The MV Ever Given was successfully re-floated at 04:30 lt 29/03/2021. She is being secured at the moment. More information about next steps will follow once they are known," the company tweeted.
The vessel's refloating came after two additional tugboats were deployed on the March 28, as reported by the Associated Press, to help a fleet of around 10 similar boats laboring to extract the 200,000-ton Ever Given. The Suez Canal Authority also deployed onland heavy machinery to dig around the ship's bow, which would make it easier for the vessel to be pulled out.
The effort was aided by a worm moon, which caused a high tide that made floating the ship easier.
"We were helped enormously by the strong falling tide we had this afternoon," Peter Berdowski, CEO of Boskalis, the company that lead the rescue effort, told The Associated Press. "In effect, you have the forces of nature pushing hard with you, and they pushed harder than the two sea tugs could pull."
Experts said a couple of days of delay would be a major inconvenience for shipping companies, but that a week or more could prove catastrophic, and not just for shipping companies.
"If the ship were to remain stuck for another week it could cause massive delays in the delivery of products, and every second of delay leaves billions of dollars' worth of disruptions on the line," Jennifer Bisceglie, CEO of supply chain risk management firm Interos, told CNET on March 26, days before it was feed.
Berdowski cautioned that the Ever Given being stuck for weeks was a very real possibility.
"We can't exclude it might take weeks, depending on the situation," Berdowski told the Dutch television program Nieuwsuur on the March 25. "It is like an enormous beached whale. It's an enormous weight on the sand."
In other words, it's a small miracle that the Ever Given was freed in six days, as further delays could have proven disasterous.
Wait, how did it get lodged in the first place?
Ever Given is a 200,000-ton cargo ship that spans a quarter mile, roughly the length of four football fields. You'll notice "Evergreen" is written across its body but, confusingly, that's branding for Evergreen Marine Corp., the Taiwanese company that operates the ship.
On March 23, just before 8 a.m. Egypt time, strong gusts of wind knocked it off course. En route to Rotterdam from China, it was holding around 20,000 shipping containers of cargo, estimated to be worth $9 billion, when it became wedged in the canal's east bank.
"The accident is mainly due to the lack of visibility resulting from bad weather conditions as the country passes through a dust storm, with wind speed reaching 40 knots," SCA's Rabie said in a statement.
No one on board was injured, according to the ship's technical manager, Bernhard Schulte Shipmanagement. But the task of extricating the Ever Given was daunting. The ship was wedged diagonally -- as you can see in the above aerial shot -- and is longer than the canal is wide. The ship spans 1,312 feet, while the canal's width ranges from 205 to 225 feet.
The Suez Canal Authority deployed a gang of tugboats on March 28 to pull the Ever Given out of its predicament, with more joining the effort throughout the week, with little success for several days. Smit Salvage, a renowned maritime rescue company, was hired to assist the SCA in breaking the bottleneck.
What did this mean?
"Ship in front of us ran aground while going through the canal and is now stuck sideways," Julianne Cona wrote on Instagram as she snapped a photo of Ever Given from her own cargo ship, "looks like we might be here for a little bit."
It was one of the approximately 321 ships that had amassed in the bottleneck, according to the Suez Canal Authority.
When the ship was lodged, shipping companies faced a dilemma: wait for the Ever Given to be floated or divert around the Horn of Africa, another sea route that links Europe and Asia. The latter option would delay shipments by up to 14 days.
Such delays could have caused severe shortages, as the global shipping industry is already beset by a lack of shipping containers and other complications arising from the COVID-19 pandemic. Oil was particularly vulnerable to the blockage, with the Suez Canal, which opened in 1869, being a key route for transporting oil from the Middle East to Asia and Europe.
"The Suez Canal accounts for nearly 30% of all container ship traffic," said Interos' Bisceglie, "with carriers transporting oil, natural gas, clothing, food, electronics, machinery, and even semiconductor chips, an item which has already been in the midst of a global shortage."
Has this happened before?
Following mechanical issues, a Japanese vessel became lodged in the ground under the canal water in 2017. Tugboats refloated the ship within hours. A year prior, the CSCL Indian Ocean spent five days aground before being pulled out by tugboats.
At first, officials at the canal hoped to dislodge the Ever Given within a day or two. Instead, the Ever Given has the dubious honor of blocking the canal longer than any other cargo ship during peacetime in history.
Suez Canal memes flowed
Has social media had anything to say about the drama? Of course it has!