The Suez Canal saga continues with no end in sight

Egypt does not exclude possible technical or human error behind the blockage

Photo: Maxar Technologies Imagery of the Ever Given in the Suez Canal captured by Maxar Technologies’ WorldView-3 satellite on Saturday, March 27, 2021.

Efforts to dislodge the ginormous container ship blocking the Suez Canal progressed overnight, with its stern and rudder moving, but it is still unclear when the tanker Ever Given could be refloated. At the same time, over 320 vessels are waiting to enter or continue their transit through world's busiest shipping route, with none of them choosing to reroute around the Cape of Good Hope, which could delay their journey by weeks.

Earlier this week the 400-metre long Ever Given (almost as long as the Empire State Building is tall) became wedged diagonally across a southern section of the canal during high winds early, disrupting global shipping by blocking one of the world's busiest waterways. Since then, dredgers have been working to remove vast quantities of sand and mud from around the port side of the 224,000-ton vessel's bow. In particular, authorities say they have managed to remove almost 706,000 cubic feet of sand to free the Ever Given.

But so far the container has barely moved. Besides, Osama Rabae, the head of Egypt's Suez Canal Authority (SCA), said on Saturday that the strong winds and the sandstorm were not the only cause of the accident. Instead, Egyptian authorities suppose that technical issues or human error might also be the cause of the grounding of a giant container ship.

"Such a complex problem entails several factors. These can include technical problems or a human mistake. I cannot determine the exact cause until investigations are concluded," he told a televised press conference in the city of Suez.

Because of the incident shipping rates for oil product tankers nearly doubled, and efforts to free the giant vessel may take weeks and be complicated by unstable weather, threatening costly delays for companies already dealing with COVID-19 restrictions.

"We are facing hardships in refloating the ship due to its large size, the high tide and the hard rocky soil [where the tanker is stuck]," Rabae admitted, adding that there is no information when the ship would be freed.

"It is difficult to give an exact time frame for solving this crisis ... We are working around the clock to end it."

Efforts to dislodge the Ever Given have thus shifted to towing, Rabae said. Retired British Royal Navy commander Tom Sharpe said the best bet for the next attempt would be a high tide today, on Sunday, but because the ship was aground both front and rear there was a risk the hull could rupture if rescuers pulled too hard.

If the current efforts do not succeed, the operation could start lifting the load off the supertanker to lighten it. In an interview to MBC Misr TV, Mohab Mamish, the Egyptian presidential adviser on Suez Canal projects and seaports, also suggested that a floating crane should be used to transfer some of the Ever Given's containers to another ship to lighten the vessel and enable it to float.

But while procedures are going on. the suspension of traffic along the channel linking Europe and Asia has deepened problems for shipping lines. The blockage is estimated to be holding up goods worth $9.6bn dollars per day in the passageway, which handles about 12% of global trade, according to shipping data.  A separate study by German insurer Allianz said the blockage could cost global trade $6bn to $10bn a week. 

According to ratings agency Moody's expectation,  Europe's manufacturing and car parts suppliers would be most affected because they operate "just-in-time" supply chains. It also said port congestion and further delays to the supply chain were "inevitable."

Most importantly, maritime monitoring website Marine Traffic told CNN that 13 of the ships awaiting transit were carrying livestock, destined for different countries in Europe and Asia. The EU director of NGO Animals International Gabriel Paun thus warned that thousands of animals being transported on the vessels - mostly Romanian - could be at risk of dying if the situation is not resolved in the next few days.

"We are sitting in front of a major tragedy if the channel is not released in the next 24 hours because there are vessels that will run out of [livestock] food and water in the next two days," Paun said.

Additionally, oil rose over 3% on Friday as more than 30 oil tankers have been waiting on either side of the canal since Tuesday, shipping data on Refinitiv showed. 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 refiners, traders said. However, there is low seasonal demand for crude and liquefied natural gas, which will likely mitigate the impact on prices, analysts said.

Nevertheless, analysts expect a greater price impact on smaller tankers carrying oil products, such as naphtha and fuel oil, for export from Europe to Asia, if the canal remains shut for weeks. Meanwhile, re-routing ships around the Cape of Good Hope could add about two weeks and extra fuel costs to the voyage, said Sri Paravaikkarasu, director for Asia oil at FGE.

Similar articles

  • China GDP spikes by 18.3% in Q1 2021

    China GDP spikes by 18.3% in Q1 2021

    Chinese economy posted a robust growth in the first three months of this year edging up to 18.3%, AP reported quoting official statistics data. The rapid growth is attributed to a rebound from the pandemic crisis, but overall growth is running out of steam with key sectors like manufacturing seen stable at pre-Covid-19 levels with their advance being bound by several factors including the trade war with US.

    53
  • UK exports to EU return to robust growth

    UK exports to EU return to robust growth

    Trade relations between UK and EU have returned to the fast growth lane in February after the registered January disruption, BBC reported, quoting official statistics data. British exports to the EU jumped by 46.6%,  to £11.6bn, following January's 42% slump when firms struggled with new trade rules related to Brexit. However, the UK Office for National Statistics noted that exports were still below last year's levels and imports from the EU had seen a weaker recovery. Other figures from the ONS showed the UK economy grew by 0.4% in February.

    31
  • Chinese exports rise by 30.6% in March

    Chinese exports rise by 30.6% in March

    Despite the pandemic, the ongoing economic crisis and punitive tariffs, China's exports rose by 30.6% in March compared to the same period last year, marking further strong growth for the country's foreign trade. Customs data released Tuesday also indicated an unexpectedly strong showing for imports, which grew by 38.1%.

    47