The Suez Canal could still be blocked for “days or even weeks”

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Egypt is trying to clear a giant container ship blocking the Suez Canal, a crucial trade route between Europe and Asia since Wednesday, an incident that could slow global maritime traffic for days or even weeks.

According to the Dutch company Smit Salvage commissioned by the operator of the vessel Evergreen Marine Corp, based in Taiwan, to help clear the vessel, the operation could take “days or even weeks”. Evergreen asked Smit Salvage and the Japanese company Nippon Salvage to put in place “a more effective plan” to rescue the ship. The first experts are expected to arrive on Thursday.

Read: Stranded container ship blocks Suez Canal

Dozens of ships waiting

“It really is a very heavy whale on the beach, so to speak,” said Peter Berdowski, executive director of Royal Boskalis, the Dutch company’s parent company.

The Egyptian Suez Canal Authority (SCA) announced Thursday that navigation was “temporarily suspended” until the Ever Given, a 400-meter-long vessel, was refloated. According to an evolving map from the Vesselfinder site, dozens of ships wait at both ends and in the waiting area in the middle of the canal.

Faced with the uncertainty, the German maritime logistics group Hapag-Lloyd, of which several ships are affected, said Thursday in a note to its customers to consider “possible diversions of ships by the Cape of Good Hope”. Or a detour of several thousand kilometers around the African continent.

What economic consequences?

The incident that took place overnight from Tuesday to Wednesday resulted in significant delays in the delivery of oil and other products. The news jumped oil prices up to 6% on Wednesday, before falling back on Thursday.

Several tugs dispatched by the Suez Canal Authority have been trying to free the giant from the seas since Wednesday morning. A maritime source said Thursday that a dredge had also arrived in the area.

The Japanese company Shoei Kisen Kaisha, owner of the container ship, said Thursday that it was working with the canal authorities for the refloating but that the operation was “extremely difficult”. The economic consequences of the blockage should be limited if the situation does not drag on, experts say.

According to Bjornar Tonhaugen of Rystad, “the effect (on prices) is likely to be small and transient”. On the other hand, “if the blockage lasts more than a few days, it could have a greater impact on prices and in a more lasting way”, he added. “We have never seen anything like it but it is likely that the congestion […] will take several days or weeks to resolve, as it should have a ripple effect on other convoys, schedules and world markets, ”said Ranjith Raja, head of Middle East oil and maritime research at Refinitiv Financial Data Aggregator.

But the current economic situation, against the backdrop of the health crisis and restrictions hampering the recovery, means that prices are unlikely to rise much immediately.

Avoid “weakening the structure of the ship”

The Ever Given, a vessel weighing over 220,000 tonnes, which was going to Rotterdam from the Chinese port of Yantian, ran aground shortly after entering the canal, not far from the city of Suez.

The size of the ship, as long as four football fields, complicates clearance operations, according to Jean-Marie Miossec, professor at Paul-Valéry University in Montpellier (south-eastern France) and specialist in maritime transport. “These ships have a significant draft, especially since they were fully loaded. Under the keel, the water level is weak, ”he explains, stressing that the authorities must take the necessary time to“ maneuver well ”.

It is a question of not “weakening the structure of the ship in the maneuvers and to properly measure the forces to be distributed throughout the hull”, adds the expert, estimating that “the technical services of the authority of the channel are competent ”for this operation.

According to Bernhard Schulte Shipmanagement (BSM), a Singapore-based company providing technical management of the ship, the 25 crew members are safe and sound. And there was no pollution or damage to the cargo of the vessel with a capacity of more than 20,000 boxes (TEU or TEU).

Experts cite strong winds as one of the causes of the incident on the 60-meter-high vessel. The SCA also mentions a reduced visibility due to a sand wind, current in Egypt at this time of the year.

Inaugurated in 1869, the canal has undergone several phases of expansion and modernization in order to support changes in maritime trade. Its breakthrough has drastically reduced the distances: 6000 km less between Singapore and Rotterdam for example.