The Ever Given’s owner has blamed the Suez Canal Authority for the blockage, saying it wrongly allowed the ship to enter the area during poor weather conditions

ever given suez canal
The Ever Given in the Suez Canal.

  • The owner of the Ever Given has said the Suez Canal Authority is to blame for the ship’s grounding.
  • The vessel was wrongly instructed to enter the canal amid poor weather conditions, say lawyers.
  • The ship’s owner is seeking $100,000 in initial compensation for losses linked to its detainment.
  • See more stories on Insider’s business page.

The owner of the Ever Given container ship that blocked Egypt’s Suez Canal for days has blamed the Suez Canal Authority (SCA) for its grounding, amid a legal dispute over compensation, a lawyer representing the owner said on Saturday.

The vessel is owned by Japanese company Shoei Kisen Kaisha. Reuters reported that lawyers acting on its behalf said the SCA had been at fault for allowing the Ever Given to enter the canal amid poor weather conditions, according to Ahmed Abu Ali, a representative of the legal team.

The incident caused chaos between March 23 and 29, as it delayed around 400 ships and significantly disrupted global trade, as Insider reported.

Around 12% of trade flows through the channel and the vessel blocked the ships from passing through it, costing about $400 million for every hour it did not move. Once it was finally freed by several tugboats and dredges, Egypt impounded it.

The vessel has been held in an artificial lake along the canal until its insurers and Egyptian authorities come to an agreement. Its crew members have since been given permission to go home.

A recording from the ship that was granted to the court also showed disagreements between SCA pilots and its control centre over whether the ship should pass through the canal, Reuters reported.

Lawyers representing Shoei Kisen Kaisha said the ship should have been chaperoned by at least two tug boats, “but this didn’t happen.”

The Japanese company is seeking $100,000 in initial compensation for losses linked to the ship’s detainment.

Officials in Egypt have demand the ship’s owners pay $600 million compensation for the disruption caused by the blockage. That claim was lowered after an initial demand of $916 million. But the insurance entity that represents Shoei Kisen Kaisha said the claim was still overblown.

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The operators of the Ever Given may be forced to unload its 18,000 cargo containers onto other ships, report says

ever given suez canal
The Ever Given, a Panama-flagged cargo ship, is seen in the Suez Canal in Egypt, on March 27, 2021.

  • The operators of the Ever Given might move its containers onto other ships, according to a report.
  • The ship is unable to deliver its goods until $1 billion in damages is paid to Egyptian authorities.
  • But transporting the containers could become a physical, legal, and logistical nightmare.
  • See more stories on Insider’s business page.

The operators of the Ever Given ship are exploring the possibility of transferring its 18,000 cargo-filled containers to other vessels as it remains stuck in legal limbo, according to a report by the Wall Street Journal.

The 224,000-ton cargo ship, which ran aground in the Suez Canal on March 23 and was freed 6 days later, still hasn’t been able to leave the Suez Canal after Egyptian authorities announced it must first pay $1 billion in damages.

But the ship’s operator, Taiwanese company Evergreen Marine Corp., is facing increasing pressure to deliver its thousands of containers – filled with everything from toilet paper to coffee and furniture – to its frustrated customers.

Read more: The 4 biggest losers of the Suez Canal fiasco – and 4 surprising winners

“Customers are asking when their boxes will be delivered after the ship seizure, and the prospect of moving the containers to other ships and delivering them to the clients in Europe is now on the table,” an unnamed source, directly involved in the matter, told the Wall Street Journal.

But any efforts to remove the 18,000, 20-foot container units from the Ever Given could become a massive physical and logistical challenge, possibly requiring officials to move the vessel, which is currently anchored in the canal’s artificial Great Bitter Lake, to the nearby city of Port Said.

“It won’t be easy to do, but there are a number of options,” the same source told Wall Street Journal. “Empty ships can be deployed to pick up boxes and some can be loaded to other container ships crossing on the same route to Europe.”

The move could also create additional legal headaches, relating mainly to claims and fees surrounding the vessel and its cargo customers.

According to the Wall Street Journal, Evergreen Marine Corp. said in a statement that it is looking into the Egyptian court order “and studying the possibility of the vessel and the cargo on board being treated separately.”

Shoei Kisen Kaisha, the ship’s owner, earlier this month filed a general-average claim against the vessel’s operators, which calls for companies with cargo on the vessel to share the risk and costs involved in the ship’s recovery.

Two maritime lawyers, Bruce Paulsen and Brian Maloney of Seward & Kissel told the Maritime Executive this week: “The seizure of the Ever Given and compensation demand for salvage and other expenses by Egypt’s canal authority escalates the complexity and cost for the numerous cargo owners with property in transit aboard the vessel.”

“Barring a settlement, those cargo owners now face additional expense and delay while the vessel’s arrest is maintained,” they added.

The ship was sailing from Asia to Europe when it got stuck in the channel, causing severe delivery delays and an epic traffic jam of roughly 400 other ships, which have since started passing through the canal again.

Evergreen hasn’t identified the customers whose shipments are on the Ever Given, although some companies, including IKEA and Germany-based supermarket ALDI, have already said they’ve been impacted.

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2 experts explain why the company whose ship blocked the Suez Canal has seen its stock surge 28% since the incident started

Suez canal ever given
  • Evergreen Marine Corporation has rallied 28% since its Ever Given ship got stuck in the Suez Canal.
  • We spoke with two analysts who said its not unusual for freight tanker stocks to see bouts of volatility.
  • Freight tanker stocks are heavily tied to shipping rates, which have skyrocketed this year.
  • However, the canal blockage exacerbated supply and demand conditions and pushed rates higher.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The stock price of the Taiwanese transportation company whose ship blocked the Suez Canal has soared ever since the incident that upended global trade began.

Shares of Evergreen Marine Corporation have gained 28% since March 23, the day the Ever Given ship got stuck in the Suez Canal and triggered an epic traffic jam of more than 400 ships.

Evergreen’s stock has been climbing since last summer, but saw a significant spike after the canal blockage. On the day the Ever Given got stuck, Evergreen tumbled 8% and closed at 42.75 New Taiwan dollars (NT$). Since then, it’s rallied to NT$55-the highest price in over a year-bringing Evergreen’s yearly gain to 440%.

It’s not out of the ordinary for ocean freight tanker stocks to experience volatility, as they’re heavily tied to shipping rates which tend to swing around, said Adam Scheiner, an analyst at UBS Global Wealth Management.

But shipping rates have been steadily rising as the world emerges from the pandemic, and the canal blockage only exacerbated port congestion and demand for shipping.

“The blockage in the Suez Canal just poured gasoline on this demand and price fire,” Scheiner told Insider.

Peter McNally, Third Bridge’s global sector lead for industrials, materials, and energy, told Insider that container shipping rates are up four times since the start of last year.

“This was the state of play before the Ever Given snarled global shipping traffic,” he explained.

A shortage of containers and difficulties dealing with the logistics of getting vessels in use back to Asia drove shipping rates higher throughout the year, McNally said. Additionally, the pandemic slowed air traffic and more companies turned to marine shipping to transport freight, he said.

High shipping rates will bode well for freight transportation companies, but Evergreen may be coming under pressure soon for its role in the global trade chaos.

The company could be facing a fine as large as $1 billion, though Evergreen’s president said the shipping giant is “free of responsibility from cargo delays” because “it will be covered by insurance,” according to Bloomberg.

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