Uncorking the Suez: Dozens of supertankers trapped for a week FINALLY start flooding through

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The first of hundreds of trapped ships snaked their way through a newly unblocked Suez Canal on Monday as the saga over the waterway seems to be coming to an end.   

The bow of the 220,000-ton Ever Given container ship was finally dislodged from the channel’s bank on Monday and towed up the waterway after tugboats had straightened the vessel in an early-morning operation and dredgers had vacuumed away large chunks of sand.   

Vessels anchored for nearly a week began moving through the Suez Canal after a grounded mega-ship was unwedged, sparking relief in a country that depends heavily on the global trade artery.

Easing tailbacks to the north and south, 113 ships were due to navigate the narrow passage by 8am local time on Tuesday, Suez Canal Authority chief Osama Rabie told reporters in the evening.

He praised the duration of the salvage operation on the MV Ever Given as ‘record-breaking’, claiming it would have taken three months anywhere else in the world.

Canal services provider Leth Agencies said the 1,300ft had been ‘safely escorted to Great Bitter Lake’ by the authority, which said it was now ‘anchored’ ahead of an investigation and out of the path of other container ships.

‘The relief is palpable that we won’t see a long-term closure of what is an important trade route,’ said market analyst Michael Hewson at CMC Markets UK.

But Guy Platten, the secretary-general of the International Chamber of Shipping, told BBC Radio 4 that legal issues arising from the blockage could last for months as people try to recover the cost of delayed or expired goods. 

‘There is no doubt about it, the disruption will carry on. Everything’s sort of out of kilter really,’ he said, adding that ‘some cargoes will have almost certainly perished as a result of this’. 

‘There’s lots of litigation coming down the road as we try and rebalance it all and people try and recover the monies they’ve lost,’ he said.  

In the hours before the ship was dislodged, the tailbacks had reached 425 vessels, and the canal authority estimates it will take over three days to end the congestion.

Maritime data company Lloyd’s List said the blockage had held up an estimated $9.6 billion worth of cargo each day between Asia and Europe, as more than 10 percent of world trade normally passes through the canal. 

Photos and tracking sites showed the Panama-flagged vessel being pulled up the waterway on Monday afternoon, opening the door for billions of dollars’ worth of goods to resume their progress through the shipping lane. 

Salvage teams were blaring their foghorns in celebration as they pulled the Ever Given towards the Great Bitter Lake, a wide stretch of water where Egyptian authorities say the ship will undergo technical inspections.  

Egypt’s president Abdel Fatteh al-Sisi had earlier declared that ‘Egyptians have succeeded in ending the crisis’ despite the operation’s ‘massive technical complexity.’ 

But it was unclear how long it would take to deal with the backlog, with the world’s largest container firm, Denmark’s Maersk, warning that ‘it could take six days or more for the complete queue to pass’. 

Satellite photos showed an armada of cargo ships still stuck in a jam six days after the Ever Given got jammed in the Egyptian shore in high winds – with £6.5billion of global trade being held up each day.

The rescue team had made a major breakthrough by dislodging the ship’s stern and straightening its position, taking advantage of a high tide brought on by a ‘supermoon’ nearly a week after the traffic jam started, strangling global trade.  

The bow remained wedged in the canal bank for several more hours after the stern was freed, but the tugboats finally wrenched it out after the high tide returned later on Monday – allowing the ship to float again. 

The fully laden vessel was hauled over the canal bank at around 3pm and the head of Egypt’s Suez Canal Authority announced shortly afterwards that shipping traffic had resumed in the waterway. 

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

Evergreen Line, which is leasing the Ever Given, confirmed the ship had been successfully refloated and said it would be moved and inspected for seaworthiness. 

The ship was due to head to Rotterdam after transiting the canal on its way from Asia, but it was unclear whether it would continue to the Dutch port after its inspection or head elsewhere for repairs. 

The Ever Given’s managers, Bernhard Schulte Shipmanagement (BSM), said there had been no reports of damage to the cargo.  

Peter Berdowski, the head of a Dutch salvage firm hired to extract the Ever Given, celebrated the successful operation by saying: ‘We pulled it off!’ 

‘I am excited to announce that our team of experts, working in close collaboration with the Suez Canal Authority, successfully refloated the Ever Given, thereby making free passage through the Suez Canal possible again,’ he said. 

The Dutch firm said the operation carried out under ‘the watchful eye of the world’ had required 13 tug boats and the dredging of approximately 30,000 cubic metres of sand. 

Egyptian authorities have said they can accelerate convoys through the canal once the Ever Given is out of the way, with canal chief Admiral Osama Rabie vowing that ‘we will not waste one second’.

He said it could take from two-and-a-half to three days to clear the backlog, while another Egyptian source said more than 100 ships would be able to enter the channel per day. 

But other estimates say it could take up to 10 days to clear the traffic jam, and Maersk said the knock-on disruptions to global shipping could take weeks or even months to unravel.

The tailback of ships carrying everything from crude oil to cattle had reached 425 by the end of the drama with vessels waiting in a queue at the two ends of the canal, in the Mediterranean and Red Seas. 

Dozens more are taking the alternative route around the Cape of Good Hope at Africa’s southern tip – adding some two weeks and thousands of miles to journeys and threatening delivery delays. 

With canal transits stopped, Egypt has already has lost over £69million in revenue, according to the data firm Refinitiv.

About 15 per cent of world shipping traffic transits the Suez canal, which is an important source of foreign currency revenue for Egypt.

Old sections of the canal – opened in 1869 and widened since – have been reopened to ease the congestion, but there is only one lane on the southern end where the ship was stuck. 

Shipping giant MSC told customers that it ‘expects this incident to have a very significant impact on the movement of containerised goods’.  

The obstruction could affect oil and gas shipments to Europe from the Middle East, with Syria already rationing the distribution of fuel in the war-torn country amid fears of delayed shipments.  

Romania’s animal health agency said 11 ships carrying livestock out of the country were also impacted, while the charity Animals International warned of a potential ‘tragedy’ affecting some 130,000 animals. 

Global container shipping was already in crisis because of disruptions caused by the pandemic, sending shipping costs rocketing because of limited space aboard the vessels. 

Egypt’s president al-Sisi had ordered preparations for some of the ship’s 18,300 containers to be removed if dislodging efforts had failed. 

Taking containers off the ship likely would have added even more days to the canal’s closure, and required special equipment that would not have arrived until later in the week. 

But as the high tides came in last night, diggers set to work removing parts of the canal’s bank while specialist tugboats also joined efforts to float the giant ship. 

The Dutch-flagged Alp Guard and the Italian-flagged Carlo Magno, which were called in to work alongside tugboats already on scene, reached the Red Sea near the city of Suez on Sunday.  

This weekend it was revealed that ships containing livestock and IKEA furnishings had been left stranded in the  maritime traffic jam.

Gerit Weidinger, EU coordinator for NGO Animals International, told The Guardian: ‘My greatest fear is that animals run out of food and water and they get stuck on the ships because they cannot be unloaded somewhere else for paperwork reasons.’

Meanwhile IKEA said it had 110 containers on the stricken Ever Given and on other ships.

‘The blockage of the Suez Canal is an additional constraint to an already challenging and volatile situation for global supply chains brought on by the pandemic,’ an IKEA spokesperson said. 

 

Economists say the Ever Given’s disruption of shipping through the Suez Canal probably won’t have an impact on global trade for more than a few weeks, and is unlikely to derail global growth this year as more people get Covid-19 vaccines and economies reopen.

But it’s another wake-up call for companies that have set up their business to rely on supply chains with little room for error, said William Lee, chief economist at the Milken Institute.

‘This is a warning about how vulnerable our supply chains are and how the just-in-time inventory techniques that have been so popular have to be rethought,’ he said. ‘The shortages and the supply chain shortages that cause assembly lines to shut down – that will have a greater impact.’ 

The incident is another ripple worsening shortages of shipping containers in Asia, which means retailers may be late getting TVs, furniture, clothes, auto parts and many other goods that are shipped via containers.

Many countries got a harsh lesson in those realities last year when commerce, was disrupted in myriad ways after new coronavirus outbreaks began in China, the world’s factory floor.

Consumers everywhere soon found that ordering online was an adventure in the unknown, with many factories shut down and trade between Chinese provinces stalled. Obtaining supplies of medicines and vital personal protective equipment such as face masks and other medical supplies became challenging, and sometimes impossible.

About 12 per cent of global trade by volume goes through the Suez Canal, but it accounts for 30 per cent  of the world’s daily shipping container freight. That makes it the most important conduit for trade between Europe and Asia.

The closure also affects oil and gas shipments. Nearly 10 per cent of oil shipments and eight per cent of global liquid natural gas moves through the Suez Canal, according to the US Energy Information Administration.

Much of the traffic involves transpiration of crude oil from the Middle East to Europe and the U.S. It’s also become an important link for Russian oil to Asia.

The disruption from the canal blockage comes at tricky time for international trade and shipping, noted Fiona Boal, global head of commodities at S&P Dow Jones Indices.

‘The cost of shipping goods from Asia to Europe hit a record high in recent months and global freight rates are already near three times the level of a year ago,’ she said.

At the same time, oil prices may be kept in check by worries that demand for oil will weaken amid renewed pandemic lockdowns in Europe. Benchmark U.S. crude oil for May delivery fell $1.03 to $59.91 per barrel on Monday after rising $2.41 on Friday. Brent crude oil for May delivery lost $1 to $63.43 per barrel after gaining $2.62 on Friday.

North and Latin America are likely to be less affected than Europe by the blockage in the Suez Canal, because much of the shipping container traffic that runs between the Americas and Asia moves through the Pacific to hubs like the Ports of Los Angeles and Long Beach, or crosses through the Panama Canal.

‘The impact on the U.S. will be less than on Europe,’ Hufbauer said. 

On Saturday, the head of the canal authority told journalists that strong winds were ‘not the only cause’ for the Ever Given running aground, appearing to push back against conflicting assessments offered by others.

Admiral Rabei said that an investigation was ongoing but did not rule out human or technical error.

Bernhard Schulte Shipmanagement maintains that their ‘initial investigations rule out any mechanical or engine failure as a cause of the grounding.’

However, at least one initial report suggested a ‘blackout’ struck the hulking vessel, which is carrying some 20,000 containers, at the time of the incident.