Freight News, Sea

Suez delays set to worsen

[ March 26, 2021   //   ]

Delays in European ports could worsen, following reports that it could take weeks to dislodge the Ever Given container ship currently blocking the Suez Canal, and that containers might have to be unloaded to free the grounded vessel, says supply chain visibility company project44.
With supply chains already struggling with multi-week delays due to other factors, the Suez Canal incident is on track to further disrupt business across the globe.
At 10.30CET Thursday, March 25, project44’s tracking showed 47 container vessels representing 540,716teu capacity currently impacted, a 42.5% increase over the 379,200 TEUs reported yesterday. Moreover, the chances of a quick solution seem to have disappeared.
Carriers’ networks could be disrupted for weeks and months in both directions on the Asia/Europe trade.

The ONE liner consortium said that it alone had 17 ships delayed or expected to be delayed by the incident.
Captain Rahul Khanna, global head of marine risk consulting at insurers Allianz, said that dislodging a large container ship in a confined space like the Suez Canal will be challenging, requiring the expertise of a specialist salvage company – not all have the experience of dealing with such vessels.
A best case scenarios would be that a combination of high tide and adequate tugs may free the vessel. However if the vessel is hard aground then lightening the vessel may be the only option and containers may have to be removed from the ship. This will delay the salvage/refloating process and is going to make the operation a lot more expensive.
The vessel owner could face third party liability claims especially with regards to damage to the canal; loss of any perishable goods in cargo; and business interruption and loss of revenue claims as a result of this blockage.
Captain Khanna added that the option of the Cape route round the coast of Africa is always available although it adds around 5,000 nautical miles to a typical voyage from the Middle East to Europe. From Singapore to Europe it probably is less, around 3,000 to 3,500 nautical miles
This means a lot more fuel consumption and a much longer journey time (around 10 to 15 days more depending upon the speed of the vessel), although it does save on Suez Canal fees. The weather is another consideration as this can deteriorate round the Cape and it would not be the first route choice for smaller vessels who may not even have the fuel capacity. For a few days blockage it probably doesn’t makes sense for ships to reroute, only if a longer term delays are envisaged.”
He said that insurers have been warning for years that the increasing size of vessels is leading to a higher accumulation of risk. These fears are now being realized, potentially offsetting long-term improvements in safety and risk management.
Such ships generate economies of scale for ship owners but also a disproportionately greater cost when things go wrong. Dealing with incidents involving large ships, such as fires, groundings and collisions, are becoming more complex and expensive.
Fires on board large container vessels are now a regular occurrence and such incidents can easily result in large claims in the hundreds of millions of dollars, if not more.
He concludes: “And with 24,000teu vessels on the horizon we are now seeing the implications of what might happen more regularly in the future.”