Ever Given impounded by Egyptian authorities
In the two weeks since the Ever Given was freed from the banks of the Suez Canal, it has once again been brought to a standstill - this time by a web of red tape and potential legal action.
The 400m container ship, which blocked the shipping lane for six days in March, has been seized by Egyptian Authorities until its owner Shoei Kisen Kaisha Ltd pays a reported $900m bill to cover the cost of lost trade and reimburse various salvage crews that worked tirelessly to free the vessel.
Admiral Osama Rabie, Chairman and Managing Director of the Suez Canal Authority, told local broadcasters that “the vessel is now officially impounded”.
A court in Ismailia, a city on the canal’s west bank, ordered the vessel to remain in the Bitter Lakes, the holding area midway through the channel where it has been idly floating since tugboats shunted it free from the mud in late March. The vessel’s owners and insurers are said to be cooperating “in good faith”.
Authorities demand “loss of reputation” compensation
The Ever Given’s insurer said around a third of the claim put forward by authorities will be used to pay the specialist rescue teams, including tugboat crews and dredging vessels, while another third is for “loss of reputation”, according to reports.
It is estimated at least $9.5bn worth of goods were disrupted every day that the canal was blocked, as a backlog formed at either end of the manmade strait. Meanwhile some shipping companies were forced to reroute vessels around the African Cape of Good Hope - a costly and time intensive decision that further gridlocked the world’s already stretched ocean freight network.
The court’s decision will further delay shipments aboard the vessel and could cost cargo owners millions of dollars. A General Average was declared by the ship’s owners last week, a form of maritime mutual insurance which spreads the cost of damage, delay and cargo loss between every business with goods aboard a vessel.
The Suez Canal was blocked by the Ever Given in the early morning of 23 March. The vessel, a 20,000 TEU giant, remained lodged for almost a week until an international rescue coalition was able to dig, push and pull it back into the centre of the waterway.
Suez Canal expansion plans greenlit by Egyptian president
The Suez Canal is to undergo a two-year expansion project, following the weeklong closure of the channel by the stranded Ever Given container ship in March.
Plans set forth to expand narrow sections of the Suez Canal have been greenlit by the Egyptian president to safeguard against future blockages.
Dredgers will widen and deepen the single-lane stretch close to the southern mouth of the canal, near where the 400m container ship got wedged earlier this year, while a second lane opened in 2015 will be extended to promote two-way traffic and alleviate the impact of bottlenecks.
President Abdel Fattah al-Sisi gave the order to “immediately start implementing the proposed development plan and put in place a timetable for completion as soon as possible”, according to reports. It is understood he expects the work to be fully completed within two years.
Ever Given negotiations rage on
The Ever Given left hundreds of ships stranded and disrupted an estimated $9.5bn in goods each day when it became wedged across a narrow passage of the trade route in March. After a week of dredging, towing and manoeuvring, it was eventually freed from the banks of the Suez Canal in the early hours of 29 March and set course of the Bitter Lakes holding area.
There the vessel, its crew and its cargo have remained ever since, while legal action between Egyptian authorities and the ship’s owners rages on, though SCA chairman and Managing Director, Admiral Osama Rabie, refutes allegations that crew have been detained.
“[There] is no truth in the allegations of detaining the ship crew, pointing to that the SCA does not mind the departure or recrew operations provided the presence of the sufficient number of sailors to secure the vessel and in the light of the presence of the ship captain as he stands as the juridical guardian of the ship and the cargo aboard,” Rabie said in a statement.
The SCA initially sought $916m in compensation to cover refloatation costs, including repairs where the channel was damaged to move the vessel, bonuses for the rescue crews who worked throughout the jam, and a package for “loss of reputation”.
Now the SCA and its chairman and Managing Director, Admiral Osama Rabie, have agreed to reduce the bill by a third. The authority has reportedly offered payment terms for the $600m to the Ever Given’s owner Shoei Kisen. Shoei Kisen has also declared a general average on the goods on board, with shippers liable to shoulder a significant outlay to get the 18,000-plus containers aboard to their final destination in the Nertherlands.