Dollar Tree says its international shipments are taking forever, and it’s a sign of how COVID-19 and the Suez blockage have swamped the world of freight

dollar tree shipping
Dollar Tree relies on international shipping more than most retailers.

  • Dollar Tree is sounding the alarm on high freight shipping costs.
  • On Thursday, the company said the spot market for freight spiked 20% since its last earnings call.
  • Industry experts forecast that that freight costs could possibly stay high until 2023.
  • See more stories on Insider’s business page.

Dollar Tree fired off a warning flare on skyrocketing freight delays and costs during its Thursday earnings call, shining a light on the turbulence within the world of international maritime shipping.

Dollar Tree executives blamed the rising prices on spiking demand, cramped capacity, and countless delays. Other major factors include equipment shortages, misplaced equipment, port delays, COVID-19-induced labor shortages and closures, and “the lingering effects of the Suez Canal blockage.”

Dollar Tree’s vice president of investor relations Randy Guiler told analysts that the retailer is especially sensitive to rising chaos in the world of international freight. Guiler cited a report from the Journal of Commerce ranking the company as the fifth-largest importer among retailers, and said that the company brings in 90,000 40-foot container ships per year.

“We believe the Dollar Tree banner imports more containers per $100 million in sales than other large retailers,” he said. “We have an outsized impact from freight costs.”

The spot market rate for freight has spiked 20% since Dollar Tree’s last earnings report on May 27. According to the Shanghai Containerized Freight Index, that’s a 28% year-over-year increase and a 400% spike since 2019. All in all, the rising rates have cost Dollar Tree an additional $185 million to $200 million since May 27.

Guiler said that a San Francisco-based freight forwarder said in a recently transportation webinar that “the transit times from Shanghai to Chicago had more than doubled to 73 days from 35 days,” while another carrier executive estimated “that voyages are now taking 30 days longer than in previous years due to port congestion, container handling delays, and other factors.”

“To give you a real-life example of the kinds of challenges we’re seeing, one of our dedicated charters was recently denied entry into China because a crew member tested positive for COVID, forcing the vessel to return to Indonesia and change the entire crew before continuing,” Guiler said. “Overall, the voyage was delayed by two months. With the current pressure on carriers, once disruptions in the supply chain occur, there is not enough capacity to make it up.”

In response to a question from Goldman Sachs analyst Kate McShane, Dollar Tree executives noted that air freight was not a viable option, due to its high costs and high demand.

Edward Jones analyst Brian Yarbrough told Insider that international shipping could take until the summer of 2023 to normalize, but that some retailers are in a “delusion” that things will settle by this upcoming holiday season.

Dollar Tree executives also estimated that the situation wouldn’t improve anytime soon. In the first quarter of 2021, Dollar Tree’s outlook assumed that the company’s regular ocean carriers would fulfill 85% of their contractual commitments. That number has dropped to between 60% and 65%.

“Industry experts expect the ocean shipping capacity will normalize no later than 2023, when many new ships come online,” Guiler said.

In the meantime, Dollar Tree’s leaders said the retailer will rely on charter vessels for the first time. One such ship has been contracted with the company for three years. The dollar store’s supply chain team is also setting priorities based on seasonality, and working to optimize port selection based on shipping availability. Guiler said that seeking out “alternatively sourced domestic product” helped Dollar Tree and Family Dollar prepare for “back to school season.”

“We’re adding alternative sources of supply, both domestic and international that do not rely on Trans-Pacific shipping,” Guiler said. “We expect some of this shift could become permanent.”

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The Ever Given incident is a warning about what Russia and China are capable of, top Democrat warns

Ever Given, Suez Canal
The eontainer ship Ever Given stuck in the Suez Canal, March 27, 2021.

  • The Ever Given container ship getting stuck in the Suez Canal was a billion-dollar disruption to global trade.
  • The incident also illustrated an overlooked maritime threat, Rep. Elaine Luria said this month.
  • That threat is growing, especially as China expands its presence at chokepoints around the world, Luria said
  • See more stories on Insider’s business page.

The container ship Ever Given getting stuck in the Suez Canal in March was a billion-dollar demonstration of an overlooked security threat, a top Democrat in Congress says.

“I would have liked to have more focus and more people’s hair on the back of their neck standing up, because I think a lot of people don’t think about maritime chokepoints,” Rep. Elaine Luria, vice chair of the House Armed Services Committee, said at a Navy League event in July.

The Ever Given was dislodged after six days, and experts were quick to note the military significance – in 2014, Russia sunk obsolete ships to block Ukrainian ships in a Crimean port. Disruptions like that are a threat in more places than most people think, Luria says.

“If you ask people if they even know what a chokepoint is they would probably come up with the Suez Canal [and] the Panama Canal, but not a lot of other ones,” Luria said at the Hudson Institute this month.

Many chokepoints are already closely monitored. The Strait of Hormuz, through which much of the world’s oil is shipped, and the Bab-el-Mandeb, through which Suez Canal traffic passes, both have a heavy multinational military presence to counter threats from state and non-state actors.

Navy aircraft carrier Forrestal
US Navy aircraft carrier USS Forrestal in the Suez Canal, August 6, 1988.

Other chokepoints are seeing increasing military activity amid changes to the security and natural environment.

The Greenland-Iceland-UK Gap, which Russian warships must transit to reach the Atlantic Ocean, is an area of renewed focus for NATO. The Strait of Malacca is a vital channel between the Indian and Pacific oceans, and China’s increasing presence there has worried neighboring countries, particularly India.

A more accessible Arctic may also make the Bering Strait busier. In March 2020, the US Navy’s top officer said he expected that strait will “at some point” be “strategically as important” as the straits of Malacca or Hormuz.

US policymakers and military officials have warned repeatedly about China’s presence in those waterways and at ports around the world.

China’s construction of bases in the South China Sea is an effort to “create their own chokepoints” in one of the world’s busiest shipping corridors, Luria said this month, adding that China’s sole overseas military base, in Djibouti near the Bab-el-Mandeb, is also in “an incredibly strategic point.”

Beijing has added “a significant pier” at that base that can accommodate an aircraft carrier, the head of US Africa Command said this spring, warning that China also sought a naval facility on Africa’s Atlantic coast “where they can rearm and repair warships.”

China army military soldiers troops base Djibouti
Chinese military personnel at the opening ceremony of China’s military base in Djibouti, August 1, 2017.

China has also invested heavily in Latin American countries, which experts say it could leverage for military benefit, including around the Strait of Magellan, through which Chinese ships first sailed nearly a decade ago.

Adm. Craig Faller, head of US Southern Command, has warned about Chinese investment in dozens of ports in the region, including on both sides of the Panama Canal.

Army Gen. Laura Richardson, who will replace Faller, told lawmakers this month that “two ports on either end of the [Panama] Canal are owned by Chinese state-owned enterprises, and so that’s very concerning.”

In the Arctic, Russia wants to do “the same thing” that China is doing in the South China Sea by exercising control over traffic along the Northern Sea Route, Luria said this month. Even before Ever Given was freed, Russian officials were using the incident to promote that route.

“So we literally have the Chinese and the Russians who want to essentially create new chokepoints, and not only that but the Chinese have positioned themselves in a variety of ways at every major chokepoint in the world,” Luria added.

Chinese President Xi Jinping at the Panama Canal
Chinese President Xi Jinping, Panamanian President Juan Carlos Varela and their wives in front of a Chinese container ship at the Panama Canal, December 3, 2018.

US officials have warned that Chinese investments in infrastructure, particularly in ports, are being made with the goal of developing “dual use” capabilities that would support future military operations.

Whether China has the political influence and logistical ability to establish such facilities is still uncertain, but the Djibouti base and other facilities that Chinese firms own or have stakes in aren’t suited for power projection, according to John Culver, who retired from the CIA in 2020 after more than 30 years as a Chinese military analyst.

“I think that the [intelligence] community can maybe take a breath here about the dire threat of Chinese bases as locuses of power projection,” Culver said in May. “I think they’re really more the accoutrements of a great power, especially a country with global trading.”

But China’s growing presence around the world’s most important waterways still presents an outsize risk, Luria said this month.

“The interruption to the flow of trade and these geographic maritime chokepoints are ways that [China] can disrupt that are not just one-on-one, like naval vessel vs. naval vessel,” Luria said.

Read the original article on Business Insider

One person reportedly died while helping free the Ever Given ship, the Suez Canal Authority says

ever given suez canal
The Ever Given container ship in the Suez Canal on March 29, 2021.

  • The Suez Canal Authority said that one person died during the Ever Given salvage operation in March.
  • In a Facebook post, the SCA said that “one death” is among the authority’s “most prominent losses.”
  • The circumstances around the person’s reported death are not clear.
  • See more stories on Insider’s business page.

The Suez Canal Authority (SCA) recently revealed that one person reportedly died during the six-day operation that eventually freed the massive Ever Given container ship from a sandbank back in April.

In several statements on the SCA’s official Facebook page, posted from May 26 to May 27, canal authorities listed the damages sustained because of the incident.

Among them, it notes “one death, the sinking of one of our rescue boats and 48 ships having to find alternative routes.”

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

In another statement posted on Facebook, the authority states: “The highlighted losses incurred by the S.C authority due to the incident of the grounding crisis of Ever Given that can be seen is the damage to a number of participating marine units and the sinking of one of SCA marine units during the salvage operations, resulting in the death of one of the participants.”

It is unclear who died and how exactly this reported death occurred. There is also no record of a tugboat or marine unit sinking during the operation.

Insider has reached out to the SCA for more information but did not hear back in time for publication.

The Japanese-owned Ever Given container ship made headlines in March after it ran aground in the single-lane stretch during a sandstorm, blocking the Suez Canal for six days and significantly disrupting global trade.

Lawyers acting on behalf of the Japanese company Shoei Kisen Kaisha, which owns the ship, have said the SCA was at fault for Ever Given’s grounding because they allowed it to enter the canal amid poor weather conditions.

The accusation comes as Egyptian officials have demanded the company pay $600 million compensation for the disruption caused by the blockage. They had initially demanded $916 million.

However, the insurer of the vessel said this amount is still too high.

The massive container ship is currently still impounded in the Great Bitter Lake, a body of water roughly 30 miles from where it first got stuck.

Read the original article on Business Insider

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.

Read the original article on Business Insider

The Suez Canal will be widened by 131 feet to avoid a repeat of the Ever Given chaos, authorities say

Ever Given, Suez Canal
Container ship Ever Given stuck in the Suez Canal, Egypt on March 27, 2021.

  • The Suez Canal Authority (SCA) said this week it plans on widening and deepening the Suez Canal.
  • Officials are making the changes in the hopes of avoiding a repeat of the Ever Given blunder.
  • The plan is to increase the width of the waterway by 131 feet and to deepen the area by 10 feet.
  • See more stories on Insider’s business page.

Egyptian authorities said this week they plan on widening and deepening parts of the Suez Canal to avoid a repeat of the Ever Given blunder in March, according to Bloomberg.

In a televised address on Tuesday, the head of the Suez Canal Authority (SCA), Osama Rabie, said an 18.6 mile stretch of the waterway would be widened by about 131 feet (40 meters) and deepened by 32 feet (10 meters) to improve the movement of ships in the area.

The expansion will take around two years, Rabie said.

Egyptian President Abdel-Fattah El-Sisi, who also spoke at the event, stressed he doesn’t want to mobilize “huge” public funding for the project, according to Bloomberg.

Read more: 4 ways small business owners can benefit from supply chain delays happening right now

The Suez Canal, an artificial sea-level waterway, is one of the world’s most heavily used shipping lanes, facilitating about 12% of all global trade.

The Japanese-owned Ever Given container ship made headlines in March after it ran aground in the single-lane stretch during a sandstorm.

It blocked the crucial waterway for six days, forcing some vessels to reroute, while hundreds had to wait for the Ever Given to be freed.

A few days after the Ever Given was dislodged, the SCA impounded the ship and its cargo and lodged a compensation claim of $916 million.

The canal authority since reduced the claims to $600 million. However, the insurer of the vessel said this amount is still too high.

The massive container ship had spent 48 days idle as of Saturday. It is impounded in the Great Bitter Lake, a body of water roughly 30 miles from where it first got stuck.

Read the original article on Business Insider

The Ever Given crisis put mega ships under the spotlight. As vessels get bigger and more automated, a long-serving captain and other experts are weighing up the risks.

Ever Given Stuck in the Sand in the Suez Canal
The Ever Given cargo ship stuck in the Suez Canal.

  • After the Ever Given blocked the Suez Canal, industry insiders are taking note of other risks.
  • Bigger ships, more automation, and smaller crews are concerns, said Capt. Rahul Khanna, of Allianz.
  • Climate change has made a shipping route through inhospitable Arctic waters more popular.
  • See more stories on Insider’s business page.

Shipping vessels have grown larger by multiples in just a few years, adding to worries among some industry insiders that a single mistake made by a massive ship could cause a global supply chain disruption, as the world saw with the Ever Given.

That ship, which was stuck in the Suez Canal for about a week in March, slowed or stalled shipping traffic around the world. It was estimated to cost the global economy about $400 million per hour, and its effects have still been rippling through the economy in recent weeks.

As ships like the Ever Given have grown over the last few decades, their crews have been shrinking because they’re using more automated processes, said Captain Rahul Khanna, global head of marine risk consulting at Allianz Global Corporate & Specialty, whose team publishes an annual safety review.

“Decades ago, the ships with 3,000 TEU – that’s the number of twenty-foot containers that can fit onboard – were considered the big ones,” said Khanna.

Now, ships like the Ever Given carry maximum loads of more than 20,000 containers. Boat-building technology could in the years and decades ahead produce ever-larger ships, perhaps growing to 50,000 containers or more. If there’s demand for such ships, modern technology could allow for such builds, Khanna said.

Between 2006 and 2020, the largest shipping vessels in the world grew by 155%, according to a January report from the United Nations Conference on Trade and Development. The biggest ships are loading or unloading 125% more at each port they visit.

With bigger boats, there could be more impactful accidents.

“While seemingly efficient, they are too large to fit in some ports, increase dangers in storms, and highly piled containers are falling, causing product and the corresponding financial losses,” said Cheryl Druehl, associate professor of operations management at George Mason University.

Even the Ever Given debacle, which grabbed hold of the worldwide news cycle, could have been worse. If that ship’s hull had broken, say, it would have taken even longer to fix the issue, Khanna said. It’s likely that a crane would have had to have been constructed nearby to remove some or all of its load. Refloating it would have been a more complex task, likely stretching into months.

Surveying the world’s riskiest shipping routes

Container Ship in the Arctic
A cargo ship in the North Pacific Ocean.

As the shipping industry gets back to its normal routine, Khanna and other shipping industry insiders walked Insider through their concerns about the next big disaster.

The most obvious answer was that another ship could get stuck in the Suez or Panama canals. The risk of a situation similar to the Ever Given’s crash in one of those waterways was “unlikely but high impact,” said Ambrose Conroy, founder and CEO of Seraph, a consulting and turnaround firm.

The risk was lower at other heavily travelled shipping lanes, including the Singapore Strait, and the Strait of Hormuz, although it has geopolitical risks of its own, said Khanna.

Ports in the future may also have trouble handling larger ships, but that’s an issue that can be fixed with proper planning, Conroy said. Instead, it’s the “black swan events” like the Ever Given that the industry needs to look out for.

One concern is a shipping route that’s becoming more popular. In decades past, a lane through the Arctic would open in summer months, giving ships a more direct path between Europe and Russia.

As the climate crisis has reduced the amount of ice in those northern regions, that passageway is now increasingly being used in the winter. It’s become so popular that the International Maritime Organization issued a revised Polar Code.

As the Ever Given stalled global shipping in March, Moscow officials pointed to the Northern Sea Route through the Arctic as an alternative.

But Arctic travel comes with its own risks. While it’s unlikely that modern ships, with all their technology, would hit an iceberg, smaller ice floats can still damage hulls, Khanna said. An oil spill in the Arctic would also be devastating to marine life. And rescue crews might have difficulty reaching a stranded ship in such inhospitable waters.

Concerns about long journeys during the pandemic

A Ship in the North Pacific Ocean.
Crew aboard a Finnish icebreaker.

Shipping industry observers also say the health and wellbeing of ship crews are a growing concern for 2021 and beyond. Shipping can take crews around the world – “It’s easier to list the places I haven’t been,” said Khanna – but many haven’t been able to visit their homes since the pandemic began.

“Crews haven’t been able to go back home on their leave,” he said.

Automation hasn’t helped, said Druehl, the George Mason professor. With more automation, ships have been able to stay away from their home ports longer. And it’s brought up issues like “skeleton crews, leading to more isolation and risk of piracy.”

Decentralizing the manufacturing industry is one possible way to cut risk, said a few industry insiders. Bring manufacturing back in the parts of the world that have become importers, and shipping won’t be as much of a concern, they said. But that’s easier said than done.

“The intricacies of global logistics are meaningless to most, that is until the truck doesn’t show up and the shelves go empty,” said Richard Weissman, director of the Organizational Management Program at Endicott College.

Issues caused by the Ever Given were still trickling through the supply chain in the last few weeks, he said. But most people won’t notice, unless they’re among the few who actively follow supply chains.

He added: “Once freight crosses the threshold of the loading dock and the truck door closes, we tend to forget about it. That’s the one thing that has to change now.”

Read the original article on Business Insider

A mini replica of the Suez Canal in a French lake is helping mariners learn the lessons of the Ever Given blockage

ever given replica
A scaled-down model of a container ship at the Port Revel Training Centre in France (L) vs. the actual Ever Given ship in the Suez Canal in Egypt (R).

  • A training facility in a French lake is helping mariners navigate the world’s trickiest waterways.
  • The lake contains a mini version of the Suez Canal, which is replicated on a 1/25th scale.
  • Owners of the facility say they’ve seen a spike in interest after the Ever Given crisis last month.
  • See more stories on Insider’s business page.

A training facility in a lake in eastern France, which replicates some of the busiest trading routes in the world, has seen a surge in interest after the colossal container ship, the Ever Given, became wedged in the Suez Canal last month.

The Port Revel facility, located in a lake on the foothills of the Alps in Saint-Pierre-de-Bressieux, is designed to help mariners and ship captains navigate crucial shipping channels.

The replicas of the different waterways, including the Suez Canal, the San Francisco Bay, and Port McArthur in the Gulf of Mexico, are made to be as realistic as possible, built to one twenty-fifth the scale of the real ones.

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

Trainees at the facility have to learn how to maneuver scale models of massive container ships without getting stuck in narrow channels, facing strong underwater currents, and machine-generated waves while doing so.

Instructors can also simulate steering problems and engine outages to see how the trainees react.

replica suez canal ever given
Instructor Philippe Boulanger talks to pilots as they steer a scaled-down model of a container ship, named the Spirit of Port Revel, during a training course on a lake at the Port Revel Shiphandling Training Centre in Saint-Pierre-de-Bressieux, France, on April 19, 2021.

Francois Mayor, the managing director of Port Revel, told Reuters that the training facility has seen a spike in interest following the chaos caused by the Ever Given container ship, which ran aground amid a sandstorm in March and blocked the Suez Canal for six dramatic days.

He said it may prompt shipping companies to send their staff for refresher courses.

“After each accident … we see new clients coming,” said Mayor, according to Reuters. “The cost of training at Port Revel is nothing like the cost of having a vessel like that stuck for a day.”

Ever Given, Suez Canal
Container ship Ever Given stuck in the Suez Canal, Egypt on March 27, 2021.

Mayor also said that while the facility has multiple machines to simulate different environments for the maritime pilots, it is “a bit hard to recreate sandstorm.”

“But we have gusts of wind which will push our ship to one side or another,” he added. “You have little space to maneuver. You have to be particularly focussed.”

port revel france suez canal
Francois Mayor, managing director of Port Revel, steers a scaled-down model of a tanker, named the Brittany, on a lake at the Port Revel Shiphandling Training Centre in Saint-Pierre-de-Bressieux, France, on April 19, 2021.

While the Ever Given might have been freed from the banks of the Suez Canal – with the help of tugboats and excavators – the 1,300-foot ship remains trapped in Egypt.

Last week, the Suez Canal Authority said they won’t release the ship until its owners agreed to pay up to $1 billion in compensation.

The ship and the 25-person Indian crew of sailors currently remain at anchor in Egypt’s Great Bitter Lake.

Read the original article on Business Insider

The bosses of the Suez Canal say the excavator operator who helped free the Ever Given is getting his overtime pay, plus a bonus

abdullah abdel gawad ever given suez canal excavator
Abdullah Abdel-Gawad standing at his excavator, March 29.

  • The excavator driver who helped free the Ever Given ought to have been paid, Suez Canal bosses said.
  • Abdullah Abdul-Gawad, a subcontractor, earlier told Insider he was still waiting for overtime money.
  • The Suez Canal Authority said it paid, though Insider couldn’t reach Abdul-Gawad’s direct employer.
  • See more stories on Insider’s business page.

The excavator driver who shot to fame for his work dislodging the massive Ever Given container ship from the Suez Canal ought to have been paid his overtime by now, the Suez Canal Authority said.

The body, also called the SCA, released a statement saying that it believes Abdullah Abdul-Gawad has got the extra money he was duel from the grueling work helping to move the ship.

Officials at the SCA, which is owned by the Egyptian government, praised his work as “above and beyond” his obligation.

The announcement, made on Facebook last week, came after Insider interviewed Abdul-Gawad, who at the time said he had not gotten overtime pay yet. He spoke to Insider nine days after the ship had been freed.

Abdel-Gawad does not work for the SCA, but a subcontractor. He told Insider at the time that he fully expected to receive his overtime pay at some point, but noted that it was slow coming.

Insider has not been able to confirm with Abdul-Gawad’s employer whether he has now received his overtime. Abdul-Gawad declined to comment.

After the Ever Given was grounded on March 23, blocking the Suez Canal entirely, images of Abdul-Gawad’s digger trying to free it became world famous. A watching world found the sight of Abdul-Gawad’s tiny excavator next to the colossal ship appealing material for memes.

But the actual working conditions he described painted a much more serious picture – he and his colleagues could only snatched brief sleep in a nearby hut, and that he feared for his safety.

Suez canal ever given
The Ever Given, trapped in the Suez Canal, Egypt, as of Thursday March 25 2021.

The ship was freed on March 29 by the combined efforts of Abdul-Gawad’s excavations, multiple tugboats, winches, a specialized dredger – and a supermoon-powered full tide.

The SCA took a victory lap in a statement on the same day, in which its head Lt. Gen. Osama Rabie congratulated SCA workers “who achieved this heroic feat saying that they have done their patriotic duty impeccably,”

But Abdul-Gawad told Insider he felt overlooked in the triumph.

In the Facebook statement, posted April 13, the SCA urged Egyptians “not to pay attention to rumors and anonymous news,” and asked people to rely only on “official sources.”

It added: “We affirm that the employee has obtained all his due salaries/fees from his employer in addition to a bonus in recognition of his service above and beyond.”

The Ever Given remains in the Suez Canal’s Great Bitter Lake, where it has been impounded amid a major legal action launched by the Egyptian government against the ship’s owners.

Read the original article on Business Insider

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.

Read the original article on Business Insider

The US is facing a supply-chain crisis as 21 cargo ships float off the coast of LA waiting to dock

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  • 21 ships were anchored off the coast of Los Angeles and Long Beach waiting to dock on Wednesday.
  • The California ports are congested and account for about one-third of US imports.
  • The delays are just the latest in a host of supply-chain issues.
  • See more stories on Insider’s business page.

A supply-chain crisis is quietly brewing off the coast of Southern California as massive freighters wait for dock space to open up.

California ports in Los Angeles and Long Beach account for about one-third of US imports. These ports operate as a primary source of imports from China and have been heavily congested for months.

On Wednesday, 21 ships were anchored off the coast waiting for a spot to open up to unload at Los Angeles and Long Beach ports, according to data from the Marine Exchange of Southern California.

Anchorages PM 1 Jan 2021

The Southern California ports are facing more congestion than ever, Kip Louttit, executive director of the Marine Exchange of Southern California, told Insider.

“The normal number of container ships at anchor is between zero and one,” Louttit said.

Some of the container ships have been waiting off the shore for weeks. One of the vessels has been at berth since April 3. Of the ships waiting to dock, half of them are what Marine Exchange calls “mega-container ships” or ships with the carrying capacity of 10,000 TEUs.

“Part of the problem is the ships are double or triple the size of the ships we were seeing 10 or 15 years ago,” Louttit told Insider. “They take longer to unload. You need more trucks, more trains, more warehouses to put the cargo.”

The ships carry millions of dollars worth of popular imports, including furniture, auto parts, clothes, electronics, and plastics, according to data from the Port of Los Angeles. Supplies of these materials could be heavily depleted in the US due to the backlog of ships.

Read more: The Suez Canal won’t be the last supply-chain fail. Here are 4 things your small business can do to benefit from the next one.

Louttit said increases in consumer spending and, as a result, a spike in imports, have overwhelmed the ports.

“The ports are setting records moving cargo,” Louttit said.

California port backlogs are already helping drive shortages and delivery delays in the US

California’s port delays seemed to have peaked in early February but have persisted in recent months.

On January 30, Southern California port congestion hit a record high when 38 container ships were waiting along the coast for room to open up to dock and unload.

Gene Seroka, a Port of Los Angeles executive, warned the Los Angeles Board of Harbor Commissioners in February that high import levels caused by increased spending during the pandemic were driving port congestion.

A video from the US Coast Guard shows dozens of ships anchored off the coast.

California port delays are just one of many factors piling onto a global supply-chain crisis

The boats waiting outside of the port, which can carry tens of thousands of shipping containers, are adding to a global container shortage, and, as a result, shipping delays.

Customers are already seeing the impact of shipping delays. During a third-quarter earnings call in February, La-Z-Boy executives said customers should expect delivery dates that are five to nine months out from the purchase date.

February’s Texas freeze and a shortage of computer chips have already pushed companies to increase prices and delay production. Several companies including Nike, Honda, and Samsung have already said they have been hampered by supply-chain issues.

As a result of California port delays and the global container shortage, customers will likely face rising prices and limited options as commodities become increasingly difficult to obtain and produce and companies are forced to compete for containers and delivery dates.

Read the original article on Business Insider