How a ship got stuck in the Suez canal and what it means for trade
BEIRUT — It’s the mishap that stopped a thousand ships — well, at least a couple hundred so far. The mammoth container ship Ever Given remained beached in the Suez Canal on Thursday, blocking the vital waterway and placing a mega-sized obstacle in the path of a shipping industry already crippled by the COVID-19 pandemic.
The Ever Given has been stuck since Tuesday, along with hundreds of other ships bearing billions of dollars’ worth of goods and energy supplies. Executives the world over are wondering when the canal can resume normal operations, even as the ship has triggered a tsunami of jokes and memes on the internet.
Here’s a look at how the situation developed and what it could mean for global shipping:
What happened? — The Ever Given, one of the world’s largest socalled ultra-large container ships, was en route from China to Rotterdam in the Netherlands when it began its passage through the Suez Canal, the 120-mile waterway that connects the Red Sea to the Mediterranean and that was used by more than 19,000 ships in 2019. (That averages to more than 50 ships per day.)
About 7:45 a.m. Tuesday, as 46 mph winds raged and a regionwide sandstorm reduced visibility, the Ever Given’s bow plowed into the eastern bank of the Suez Canal some 93 miles from its southern entrance, according to the Egyptian government’s Suez Canal Authority.
Though the ship is wedged at roughly a 45-degree angle, its 1,312foot length — equivalent to three Empire State Buildings laid end to end — means that it has completely blocked the canal in an area where the waterway is only a single lane. (The Egyptian government had deepened the canal’s main waterway in 2015 and opened a parallel 22-mile channel.)
The Ever Given clocks in at more than 200,000 tons and bears almost the same weight in containers stacked several stories high on its deck.
That had some parties questioning the official explanation, said Richard Meade, managing editor of the London-based Lloyd’s List Maritime Intelligence.
“People have been slightly incredulous, saying how could a gust of wind move a ship of this size,” Meade said. “But the high flat sides of the containers stacked up to the top of the ship — it’s not inconceivable that is to blame.”
John Konrad, founder of the shipping news website gCaptain.com, agreed.
“All these steel containers act like a giant sail,” he said. “The wind presses against a huge steel wall that’s many stories tall.”
What has been the blockage’s impact? — Since the Ever Given ran aground, a traffic jam of an estimated 210 ships has formed at the entrances of the Suez Canal, Meade said.
That may seem like a small number, especially considering that around 90% of the world’s traded goods are transported by sea around the world. But with billions of dollars of value passing through the canal every day for container-stored goods alone, “delays are costly,” Meade said.
And that’s not to mention dry bulk shipping and energy supplies, with the latter amounting to roughly onetenth of the world’s daily global oil consumption, according to Kplr, a market research firm. (As of Wednesday, Kplr counted 29 ships carrying energy supplies either waiting or approaching the canal.)
Crude oil markets have already suffered an increase of some 3% in the price per barrel in reaction to the blockage.
Whether the incident will have more significant consequences depends largely on how long the situation will last. If the ship is freed in the coming two days, Meade said, “it will be a minor blip.”
But more delays will cause cascading effects on arbitrage trade flows, freight costs and insurance rates, said analysts at S&P Global Platts, who reported that traders considered the situation an “arbitrage killer” if it wasn’t soon resolved.
If the crisis drags on, at some point the waiting ships will have to face the prospect of making a U-turn and going around the Cape of Good Hope instead — adding three weeks to their journey.
“Alternative supply chains would have to be completely constructed,” said Meade.
In an acknowledgment of the difficulties caused, Shoei Kisen Kaisha, the Japanese company that owns the Ever Given, issued an apology on Thursday, saying in a statement on its website that it was “working to resolve the situation as soon as possible.”
“We would like to apologize to all parties affected by this incident, including the ships traveling and planning to travel through Suez Canal.”
What’s being done to dislodge the ship? — In the hours following the Ever Given’s grounding, Egyptian authorities dispatched eight tugboats — one of them high-powered — to heave the ship off the embankment, while a number of excavators removed sand near the Ever Given’s bow. The ship’s crew also reduced weight by releasing ballast water used to help balance the ship. A day later, dredgers were brought in, with crews hoping high tide in the evening would help lift the Ever Given free.
Those attempts failed. On Wednesday night, authorities moved vessels out of the queue to enter the canal — a sign that the wait could be a long one. They also called in Boskalis, a Dutch dredging and heavy lift company, which was set to begin work Thursday morning.
But any attempt to move the Ever Given faces considerable challenges owing to the sheer size and weight of the ship, with its front and back lying on the sandbars on the canal’s banks, said Boskalis CEO Peter Berdowski in an interview with Dutch television.
“It is like an enormous beached whale. … You come to the conclusion that it’s not possible to pull it loose,” he said.