Suez Canal backlog grows as efforts resume to free trapped ship
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4 min read . Updated: 25 Mar 2021, 11:57 PM IST Logjam on both sides of the waterway as some shippers consider diverting cargoes
Premium 4 min read . Updated: 25 Mar 2021, 11:57 PM IST The Suez Canal remained shut Thursday as Egyptian authorities worked to clear a ship blocking the critical waterway and shipping experts warned a resumption of traffic through the channel could still be days, if not weeks, away.
The canal, which connects markets from Europe to Asia, is a transit point for oil products refined in Europe and crude oil from North African and Black Sea ports. Exporters and customers on both continents were girding for delays.
Singapore’s transport minister told port authorities to prepare for disruptions. “Some draw down on inventories will become necessary" if the blockage is prolonged, Ong Ye Kung said in a Facebook post Thursday. Ducati Motor Holding said some customers of its high-end motorcycles, built at a Bologna, Italy, plant, probably won’t get their bikes on time.
Tugboats and a dredger resumed work early Thursday to dig out the Ever Given—a 1,300-foot ship operated by Taiwan-based Evergreen Group—partially refloat it and move it out of the way. As the day progressed, people involved in the operation described an increasingly tricky engineering and logistics challenge.
The bow of the ship is still wedged deep into one side of the canal, requiring dredging, these people said. The ship needs to be lightened by taking off fuel, ballast water and, possibly, a portion of its container cargo. With no cranes high enough along the stretch of canal where the ship is marooned, helicopters are the only option. Officials are hoping a higher-than-normal tide expected over the weekend could help lift the ship free.
Evergreen has hired Dutch ship-salvage specialist Smit Salvage to help with the operation. Peter Berdowski, Chief Executive of Smit parent Royal Boskalis Westminster, told Dutch state television that the operation “can take days to weeks."
Danish shipping giant A.P. Moller-Maersk A/S told customers it expected a traffic backlog to grow. “The incident continues to create long tailbacks on the waterway, stopping vessels from passing and causing delays," it said in an advisory. Maersk, the world’s biggest liner company in terms of capacity, said four of its vessels were stuck in the canal and another three were waiting to enter.
Suez Canal service provider Leth Agencies said Thursday that 70 northbound ships were stuck, along with another 79 southbound ships—up from about 100 vessels combined—were waiting late Wednesday. The World Shipping Council, a shipping trade body, said a maximum 106 ships can cross the waterway a day, and warned it could take a number of days to clear the queue of ships once the Ever Given is pushed out of the way.
The Suez Canal Authority has reopened an older part of the channel to divert some ships, but the passage can only handle smaller vessels.
“We could be here for days," said Manolis Kritikos, a mechanic at a Greek-operated tanker, stuck in the waterway. “Nothing is moving, and the radio talk is that we’ll be here until the weekend."
Shoei Kisen Kaisha Ltd., the owner of the Ever Given, said it was doing its best to free the ship but “the situation involves extreme difficulty." Evergreen Group said it was informed by the owner that the crew, ship and cargo were safe and there was no marine pollution as a result of the grounding. The operator said it would continue to coordinate with the owner and the canal authority to free the vessel and “mitigate the effects of the incident." It said, though, that responsibility for any expense incurred in the recovery operation, third-party liability and the cost of repair is the owner’s.
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The ship had been sailing to Rotterdam from China, according to shipping data.
The Suez Canal is a vital trade route for tankers carrying oil and natural gas, along with container ships moving manufactured goods such as clothing, electronics and heavy machinery from Asia to Europe and the other way around. Around 19,000 vessels crossed the Suez in 2020, according to the Suez Canal Authority. Some 39 ships transit the Suez Canal daily on average, according to maritime industry trade group Bimco.
Shipping operators occasionally divert ships from the canal to the Cape of Good Hope around the southern tip of Africa to avoid bottlenecks, but sailings can take two weeks longer and cost cargo owners more in freight costs. Shippers said early Thursday they were already taking alternative routes to get supplies of oil, gas and other goods. Shipping costs have risen.
The cost of renting some tankers for voyages from the Middle East to Asia has jumped 47% over the last three days, as shippers seek replacements from deliveries that used to transit from Europe to Suez, said Anoop Singh, Singapore-based head of tanker analysis at Braemar ACM.
Avoiding the canal by sailing around Africa can add $450,000 in costs per voyage, Mr. Singh said. As a result, vessels that were already at the entrance of the canal or nearby have mostly stuck with their plans so far. Braemar estimates the equivalent of 2 million barrels a day of crude and refined oil products are currently stuck at the canal—about 2% of global oil consumption.
It was sailing northbound as part of a convoy when it got stuck in the canal at around 7 a.m. local time Tuesday, according to Gulf Agency Co., a service provider in the canal.
An Evergreen spokesperson said the ship was probably hit by strong winds causing it “to deviate from the channel and run aground."
Parts of the 120-mile long Suez Canal are a single lane stretch waterway measuring just 300-feet wide, which can require ships to travel through them in one direction at a time. Ships transit in northbound and southbound convoys. Any ship getting stuck can stop others from completing the transit.
Corrections & Amplifications
Manolis Kritikos is a mechanic at a Greek-operated tanker. An earlier version of this article misspelled his surname as Krtikos. (Corrected on March 25)
William Boston contributed to this article.
This story has been published from a wire agency feed without modifications to the text.
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