Jun 28, 2021

Egypt and Ever Given owner close to compensation deal

EverGiven
Logistics
SuezCanal
Supplychain
3 min
The Suez Canal Authority and the Ever Given’s owner and insurers say an agreement in principle has been reached over contentious compensation claims

An agreement in principle has been reached between Egyptian authorities and the owners of the Ever Given container ship over the blockage of the Suez Canal in March. 

The 400-metre vessel, which became wedged across the trade route and blocked traffic for nearly a week, has been detained at the Bitter Lakes holding area since it was refloated. The Suez Canal Authority (SCA), the operator of the trade channel, initially sought a $916m compensation package to cover loss of transit revenue, pay international salvage teams who worked around the clock to free the vessel, and make repairs to the canal’s banks. 

The claim was disputed in court, with the ship’s Japanese owner Shoei Kisen Kaisha Ltd. and the ship’s insurers countering that the vessel should never have been allowed to enter the strait. The claim was later reduced to $550m after a series of court hearings and appeals. 

Agreement in principle reached

Now it seems all parties are close to agreeing on a final fee to release the Ever Given and the estimated $1bn worth of goods on board. The UK P&I Club, the ship’s third-party loss insurer, said in a statement that “an agreement in principle between the parties has been reached” after “extensive discussion” with the Suez Canal Authority.

“Together with the owner and the ship’s other insurers we are now working with the SCA to finalise a signed settlement agreement as soon as possible. Once the formalities have been dealt with, arrangements for the release of the vessel will be made,” the insurer added. 

Timeline: Refloating the Ever Given


Tuesday, 23 March
Suez Canal blocked by the Ever Given 

At day break in Egypt, one of the world’s biggest container ships veers off course and becomes wedged diagonally across the Suez Canal. The Ever Given, a 400 metre, 20,000 TEU vessel, blocks transit and leaves dozens of ships stranded at either end of the canal. 

Wednesday, 24 March 
First rescue attempts fail 

Initial efforts to refloat the Ever Given fail. Tug boats and dredgers try to dig the ship out of the mud and nudge it away from the bank, but make little progress. By this time, more than 100 vessels are piling up, waiting for news. 

 

Ever Given


Thursday, 25 March 
Navigation of the channel suspended

The Suez Canal Authority (SCA) officially suspends navigation of the manmade strait “until the floatation works of the large Panamanian container vessel […] are complete”. The backlog grows by a further 50 ships.

Friday, 26 March 
Costs rise as new plan forms

International recovery teams join the efforts with plans to refloat the Ever Given during the high tide on Saturday evening. Mass dredging down to a depth of 16 metres gets underway. The estimated daily cost of the blockage is $9.5bn. 

Saturday, 27 March 
Race against the clock

Recovery teams continue their work around the clock as they race to remove enough soil and sand to float the Ever Given on high tide. Suez-bound vessels are now traversing the southern tip of Africa rather than join the logjam in the Mediterranean and Red seas. 

Sunday, 28 March 
Full moon reveals end in sight

High tides from a full moon raises hopes that tonight will be the night. Excavation works continue as more tugboats from Europe join the rescue operation. Around 30,000 cubic metres of sand have now been shifted from around the Ever Given’s bow.

Monday, 29 March 
Free at last

Cheers from tugboat and excavation teams ring out between the banks. The Ever Given is confirmed free at 3pm local time, and will soon head to the Bitter Lakes holding area for a full inspection. Officials immediately get to work on the backlog of ships.
 

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