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 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.
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.
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.
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.
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
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 beingused 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
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.”
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.
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.
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.
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.
“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.
“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.
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.
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.
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.
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.
Rabie said that its investigation into who was at fault for the grounding will be concluded Thursday, the Guardian reported. He denied any culpability on the SCA’s part, and said that “of course” the ship’s owner was at fault, the paper reported.
The ship’s technical managers, Bernhard Schulte Shipmanagement (BSM), said in a statement that it found the SCA’s decision to impound the Ever Given “extremely disappointing,” citing the cooperation it had offered the authority in investigating the cause of the grounding.
In early April, Shoei Kisen Kaisha filed a “general average” claim, which would share any costs between the ship’s insurers and the owners of its cargo.
General average is a principle of maritime law that means risk for damages is shared between the ship’s customers.
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.