Attempt to refloat mega-ship blocking Egypt's Suez fails
Cairo, Egypt: An attempt to refloat a mega-ship blocking Egypt's Suez Canal failed Friday, the vessel's managers said, as the crisis forced companies to re-route services from the vital shipping lane around Africa.
The MV Ever Given, which is longer than four football fields, has been wedged diagonally across the entire canal since Tuesday, shutting the waterway in both directions.
"Another attempt to refloat the vessel earlier today... was not successful," the Singapore-based Bernhard Schulte Shipmanagement (BSM) said in a statement.
The blockage has caused a huge traffic jam for more than 200 ships at either end of the 193-kilometer (120-mile) long canal and major delays in the delivery of oil and other products.
Shoei Kisen Kaisha, the Japanese company that owns the Ever Given, had said earlier Friday that crews were using tugboats and dredgers to refloat the ship.
BSM said, "the focus is now on dredging to remove sand and mud from around the port side of the vessel's bow".
It said Smit Salvage, a Dutch firm that has worked on some of the most famous wrecks of recent years, confirmed there would be "two additional tugs" arriving by Sunday to assist.
"Arrangements are also being made for high-capacity pumps to reduce the water levels in the forward void space of the vessel and the bow thruster room," BSM added.
It said there had been "no reports of pollution or cargo damage and initial investigations rule out any mechanical or engine failure as a cause of the grounding".
Crews had been seen working through the night, using a large dredging machine under floodlights.
But the vessel with a gross tonnage of 219,000 and deadweight of 199,000 has yet to budge, forcing global shipping giant Maersk and Germany's Hapag-Lloyd to look into re-routing around the southern tip of Africa.
"With the Suez Canal set to remain blocked for at least another day or two, shipping companies are being forced to confront the spectre of taking the far longer route around the Cape of Good Hope to get to Europe or the east coast of North America," said Lloyd's List, a shipping data and news company.
"The first container ship to do this is Evergreen's Ever Greet... a sistership to Ever Given," it said, adding the route takes an additional 12 days.
Egypt's Suez Canal Authority said the mega-ship veered off course and ran aground when winds reaching 40 knots whipped up a sandstorm that affected visibility.
BSM also said that "initial investigations suggest the vessel grounded due to strong wind".
Shipping expert Rose George said it was "inevitable there's going to be some knock-on cost effect" for consumers around the world.
George also cast doubt on the official reason that gusts of wind caused the ship's grounding.
"I don't know if that's true, but I do know that more than two-thirds of marine accidents are due to human error," she told AFP in London.
Fears of weeks-long blockage
Lloyd's List said data indicated 213 vessels were now stalled at either end of the canal, which links the Mediterranean and the Red Sea.
The blockage was holding up an estimated $9.6 billion worth of cargo each day between Asia and Europe, it said.
"Rough calculations suggest westbound traffic is worth around $5.1 billion daily while eastbound traffic is worth $4.5 billion," said Lloyd's.
The canal authority has said between 15,000 and 20,000 cubic meters of sand would have to be removed in order to reach a depth of 12-16 meters and refloat the ship.
If those efforts fail, salvage teams will look to unload some of the Ever Given's cargo and take advantage of a spring high tide next week to move the vessel.
Egyptian President Abdel Fattah al-Sisi's seaports adviser, Mohab Mamish, who oversaw the recent expansion of the waterway, told AFP late Thursday that "maritime navigation will resume again within 48-72 hours, maximum".
Salvage experts had already warned the shutdown could last days or even weeks, however.
Turkey on Friday offered to send a tugboat to help Egypt free the Panama-flagged vessel, as it pressed on with its bid to mend ties with regional rivals.
Crude prices jumped by almost six percent Wednesday in response to the canal blockage.
But they tumbled on Thursday, at one point completely wiping out the gains.
"Oil prices corrected excess gains that accumulated from the Suez Canal blockage as the disruption's effect is likely not one that will last too long," said Bjornar Tonhaugen of energy consultancy Rystad.
Dutch firm in Suez ship rescue
A Dutch super-salvage firm that has worked on some of the most famous wrecks of recent years now faces one of its biggest challenges in the Suez Canal.
Netherlands-based firm Smit Salvage has been hired to help shift the 400-meter, 200,000-tonne Ever Given container ship currently blocking the Suez Canal.
Here are some key facts about the company, whose CEO has described the mega-ship as a "beached whale":
Smit Salvage specializes in rescuing ships in distress and recovering wrecks around the globe.
It also pumps out and stores hazardous substances like fuel from sinking ships to prevent pollution.
The company was founded in 1842 in the Dutch port city of Rotterdam and now has four "strategic emergency response bases" in Rotterdam, Houston, Cape Town and Singapore.
In 2010 SMIT was bought by Royal Boskalis Westminster, a Dutch-based marine company that specializes in dredging and port development.
Together with the Mammoet company, Smit Salvage recovered the Russian nuclear-powered submarine Kursk, which sank during maneuvers in the Barents Sea in 2000, killing all 118 crew members.
The Costa Concordia cruise ship sank in January 2012 after hitting a rock just off Giglio Island in western Italy, with the loss of 32 lives. Smit Salvage bunkered some 2,200 tonnes of fuel distributed among Costa Concordia's 17 tanks.
Smit has also been involved in a series of operations involving cargo and oil ships.
These include the oil tanker Prestige which sank off the Spanish coast in 2002, spilling 63,000 tonnes of oil into the sea.
The Dutch company was involved in salvaging the Norwegian ship Tricolor, which sank off France's Dunkirk harbor in 2002 after a collision, carrying almost 3,000 vehicles onboard.
In 2011 Smit took apart the cargo ship TK Bremen after it ran aground in northwest France, managing to avoid pollution to the site.
More recently in September 2020, SMIT helped extinguish a massive fire on a stricken oil tanker, the New Diamond, off Sri Lanka's coast.
Smit Salvage says it keeps specialized equipment in its four bases around the world which is "airmobile and ready for immediate dispatch."
It can also use the resources of its parent company Boskalis, which includes 900 vessels and dredging equipment.
The equipment includes floating cranes, anti-oil pollution booms, fire-fighting equipment, submersible pumps, high-powered cutters, decompression chambers, and sonar equipment.
SMIT's team counts divers, engineers, naval architects, geologists, marine biologists, bomb disposal experts, and heavy lifting experts.
The job could take days or even weeks and involves numerous technical challenges, Boskalis chief executive Peter Berdowski said this week.
Likening the Ever Given to a "really heavy whale on the beach", he warned there was a real risk of the boat breaking apart if pulled too hard by tugs.
Moving the boat would probably involve removing petrol and water to reduce its weight, before possibly taking off containers from the ship.
It could also involve dredging sand, as the company had done with a ship stranded on a sandbank on the river Elbe in Germany.
That operation also involved 12 tugboats.
Despite its various bases, "the equipment you need is of course not necessarily around the corner", he also warned.
How much is the Suez mishap going to cost?
The total cost of the Suez Canal accident is clearly hard to calculate, and analysts say much will depend on how long it takes to sort out.
The Taiwan-owned, Panama-flagged MV Ever Given, a 400-meter (1,300-foot) long and 59-meter wide container ship, has been lodged sideways across the waterway since Tuesday.
At present, more than 200 ships are stuck, with several billion dollars worth of goods on board.
'Could not have come at a worse time'
The coronavirus pandemic has already brought unprecedented pressure to bear on global supply chains, so the grounding of a giant container ship "could not have come at a worse time for one of the world’s busiest manmade waterways", noted Jonathan Owens, a logistics specialist at the University of Salford Business School.
The total value of goods that are now blocked or will have to be shipped along an alternative route varies according to how it is estimated.
Owens says the equivalent of $3.0 billion worth of merchandise normally passes through the canal each day.
Lloyd's List, a British maritime shipping publication, says daily traffic in both directions is worth around $9.6 billion.
$£?? Anybody's guess
Given the large number of companies affected, directly and indirectly, it is impossible at this point to quantify the value of the merchandise being held up, according to Moody's analyst Daniel Harlid.
And just because something is delayed does not mean it has been lost, notes Jai Sharma, a maritime transport lawyer at Clyde and Co.
The final impact on companies, and possible chain reactions still to come, cannot be calculated now and will depend in part on the level of stocks in hand, he says.
Plan B for crude
And while the blockage has been cited as a factor in higher oil prices, that sector could in fact be affected less than others, because only around 1.74 million barrels of crude pass each day through the canal.
Eighty percent of Middle Eastern oil headed for Europe, which not a lot to begin with, is pumped through the Sumed pipeline from the Red Sea to the Mediterranean near Alexandria, says Paola Rodriguez Masiu at Rystad Energy.
The pipeline currently has the capacity to spare, she notes.
Slow boat to Rotterdam?
Transporters can now either wait for the 200,000-tonne ship to float free, which could take days or weeks, or sail around the southern tip of Africa.
Shipping giants Maersk and Hapaq-Lloyd are seriously considering the second option.
That is likely to cost several hundred thousand dollars in extra fuel, raising shipping costs by 15-20 percent according to Plamen Matzkoff, an analyst at VesselsValue.
Lawyer's are lining up
In addition, up to 90 percent of shipments are not insured against delays, Lloyd's List points out.
It quoted sector specialists as saying that lawyers would likely be kept busy arguing who should pay the bill.
As for easing the ship from its new berth, the cost could run to several million dollars, Sharma estimates, especially if containers have to be unloaded from it first.
But transporters' insurance policies are often underwritten by several companies, Moody's analyst Soichiro Makimoto says, so that tab at least is likely to be shared by insurers and re-insurers.