Suez Canal Ship Blocked, The (Real) Consequences
Even with modern navigation system, the worst can happen On March 23 2021, while crossing the Suez Canal on her way to Rotterdam, the Merchant Vessel (MV) Ever Given grounded in the middle of the Canal. Probably because of strong gusts of wind and a sandstorm, this maritime incident caused a total interruption of traffic on the Suez Canal for 6 days, blocking 425 ships on both sides.
6 days and 13 tugs needed to dredge 30,000m3 of sand
The story of the Suez Canal ship blocking the trafic is a big story. The Dutch company Boskalis was in charge of the dredging operation of the Ever Given, a huge 400m floating shed, weighing 220,000 tons and carrying more than 20,000 containers. The assistance lasted 6 days to refloat the ship firmly anchored in the sand. While tugs tried to pull and push the ship, excavators dug to free the bow from the sand and silt.
15M dollars of daily losses for Egypt
An insurer had calculated that each day of blockage had a cost of approximately 8 billion dollars to world trade. Egypt estimated that the country lost between 12 and 15 million dollars per day. Determined to be reimbursed for part of the loss, it claimed more than $900 million from the ship-owner and the insurance companies. Based on a greatly overvalued market value of the ship, Egypt finally asked for “only” 550 million dollars.
106 days of negotiations
The ship-owner had to pay an additional $100 millions in re-float costs. Furthermore, by invoking general average, the charterer’s insurers and the shippers (owner of the goods) had to agree on the amount of compensation to be reimbursed in proportion of the sums loaded on the vessel.
Meanwhile, the Indian crew was “detained” for 106 days by the Egyptian authorities, the time to find an agreement in order to leave for departure the suez canal ship blocked. Although this incident seems to have lasted for a very long time, it is not the longest. During the “Six Day War”, Israel occupied the Sinai for 8 years, holding back 14 commercial ships for 3,016 days moored on Amer Lake.
Dependence on the Suez Canal for world trade
Inaugurated in 1869 after 10 years of work, this 162 km long strip of water opened the maritime route between Asia and Europe. Today, it is an essential route for globalization and its just-in-time management. Back 152 years ago, the ship route passed South of Africa adding 15 days of sailing. A considerable cost for maritime companies due to high prices of fuel.
The Suez Canal between the Red Sea and the Mediterranean Sea represents 13% of the world maritime traffic, and 75% of the traffic between China and Europe.
[…] March 2021, the incident of the cargo vessel Ever Given and the following blocking of the Suez Canal was a strong reminder of the strategic importance of […]
[…] This incident is reminiscent of the ship container Ever Given. Due to strong winds, it had blocked the Suez Canal for a week. This had significant consequences. […]