Thread: Suez Canal blocked after massive container ship runs aground

Good news for the airlines. Air freight just became more viable in many markets.

Piracy fears mount as ships take long way around Africa to avoid blocked Suez Canal


CAIRO - Brand-new Kia automobiles, cases of Heineken beer, live animals and billions of dollars of crude oil and other commodities remained stranded in the Suez Canal throughout the day on Friday. Meanwhile, tugboats and dredgers tried to free a grounded container ship that has come to symbolize the perils of a global economy that relies on goods traveling around the world in larger and larger vessels.


The Ever Given, one of the largest container ships ever built, has been stuck in the canal since Tuesday, creating an increasingly expensive traffic jam on both sides of the waterway. Some tankers have already opted to travel around the southern tip of Africa instead, adding weeks to their journeys, through a region known for piracy.

"It just shows you how vulnerable our supply-chain lines are," said Guy Platten, secretary general for the U.K.-based International Chamber of Shipping.


On Friday morning, the canal's service provider, Leth Agencies, said in a tweet that the Ever Given "remains grounded in the same position" with tugboats and dredgers working to dislodge the vessel, which is blocking the flow of an estimated $12 billion in goods.


Meanwhile, the Japanese owner of the ship expressed hope that it could be freed by Saturday night. Yukito Higaki, president of Shoei Kisen Kaisha, apologized Friday for the "great trouble and concern," according to the Japanese financial news website Nikkei Asia.


Egypt's Suez Canal Authority said Friday afternoon that its dredging operations were roughly 87% complete, but navigational safety regulations prevented the dredging ship from moving too close.

The U.S. Navy plans to send a team of dredging experts to the canal to assess the problem, CNN reported.


With some experts predicting that freeing the ship could take weeks, a number of global shipping companies on Friday began seeking alternative routes.


"We're now beginning to see even vessels that had entered the Mediterranean hang a U-turn," Lars Jensen, the CEO of Denmark-based SeaIntelligence Consulting, told The Washington Post.


At least seven tankers carrying liquefied natural gas were diverted, including three steered toward the longer route to Europe via the Cape of Good Hope in southern Africa. Another nine tankers were expected to be diverted if the blockage continues into the weekend, an analyst for data intelligence firm Kpler told the Guardian newspaper.

At least four long-range oil tankers with the capacity to haul 75,000 tons of oil were also possibly headed around the Cape of Good Hope, London-based ship brokering firm Braemar ACM told Reuters, adding that shipping rates have nearly doubled this week "as the market starts to price in fewer vessels being available in the region."


On the ship-tracking service Marine Traffic, several ships could be observed changing course Friday.


Detouring around Africa is likely to add a week or two to most itineraries and hundreds of thousands of dollars in additional fuel costs.


With more ships potentially being diverted to the Cape of Good Hope, piracy could increase. Pirates have long preyed on ships moving in the waters off the Horn of Africa, and the seas off oil-rich West Africa are now considered among the world's most dangerous for shipping.


Over the past two days, the U.S. Navy said it has been contacted by shipping firms from multiple countries concerned about the heightened risks of piracy to ships being rerouted, a spokesperson for the U.S. Navy's Fifth Fleet, based in Bahrain, told the Financial Times.


"There is a risk there, and it's probably another reason why the ocean carriers will think twice before they actually go around the Horn," said Genevieve Giuliano, a professor at the University of Southern California's Sol Price School of Public Policy.


The Ever Given, operated by Taiwan-based Evergreen Marine Corp., was headed to the Netherlands on Tuesday when it ran aground in the 120-mile-long passage from the Red Sea to the Mediterranean during a dust storm. Exactly how the stranding occurred remains unclear, but experts have speculated that the containers stacked atop the ship could have acted like a massive sail propelling the boat forward in high winds.


Bernhard Schulte Shipmanagement, which is responsible for managing the ship's crew and maintenance, has said that an investigation into the incident is underway. But officials have yet to release any details, including who has been questioned. Typically, Suez-based pilots guide the ship through the narrow passage, and the management company has said that two pilots were on board when the boat ran aground.


Continued failure to dislodge the ship could become a source of embarrassment for Egypt, where the canal and its pivotal role in global trade is a source of national pride. The country spent $8 billion in 2015 to widen parts of the canal, but not the section in question.


With more than 200 other ships stuck in the bottleneck, moving the Ever Given will only create a new set of headaches. Many of those vessels will arrive in European ports at the same time, and find they have nowhere to dock.


The unprecedented pileup could strain global supply chains already stressed by the coronavirus pandemic.


On top of the need to shuttle raw materials to industrial manufacturers and pharmaceutical companies, shipping firms are grappling with extraordinary demand for consumer products, which has created a scarcity of empty containers.


"There is this boom we are seeing which has never happened before," said Nils Haupt, a spokesperson for Hapag-Lloyd, an international container shipping company.


Five of Hapag-Lloyd's vessels are stuck near the Suez, including the New York Express, which is locked in the Great Bitter Lake, and the Tsingtao Express, one of many ships waiting in outer anchorage in Port Said.


The containers aboard many of the ships, with goods mostly from China, are destined for consumers in the United States and northern Europe. Treadmills, desks, coffee machines and home improvement supplies are among the shipments as many continue to work and exercise at home, Haupt said.


Just a few days into the blockage, Haupt does not expect the delay to hurt many consumers yet. While more than 200 vessels are in the line to traverse the Suez eventually, several of Hapag-Lloyd's ships are among the many others that have already been rerouted.


While most consumer goods passing through the Suez Canal are headed from China to Europe, the cascading chain of dominoes will eventually reach America. "We're all connected globally," Platten said.


The ongoing crisis highlights how much of the world economy relies on seafarers, some of whom have gone a full year without taking a break or seeing their families because of the pandemic, Platten said.

Piracy fears mount as ships take long way around Africa to avoid blocked Suez Canal

Originally Posted by Buckaroo Banzai

It is reposted at the NY Times that the evergreen ship has space for 20,000 containers

That is just unimaginable . . .

Originally Posted by panama hat

That is just unimaginable . . .

Yea, it sounded like a lot to me too, but...

" The Ever Given is one of the world’s largest container ships, with space for 20,000 metal boxes carrying goods across the sea. "
In Suez Canal, Stuck Ship Is a Warning About Excessive Globalization - The New York Times

Originally Posted by Buckaroo Banzai

It is reposted at the NY Times that the evergreen ship has space for 20,000 containers

Originally Posted by panama hat

That is just unimaginable . . .

It is the tenth biggest container ship in the world, the biggest ones are 24000 TEU's.
TEU is based on 20' containers and these ships carry a mix of mainly 20' and 40' containers.

Originally Posted by Buckaroo Banzai

It is reposted at the NY Times that the evergreen ship has space for 20,000 containers,

Perhaps NY times reposted what somebody posted here 3 days ago:

Originally Posted by Klondyke

Ever Given - over 20,000 containers 20ft:

I am speculating, but the "Blackout" statement is a vital clue.

Well it is not like they blew a fuse or tripped a breaker? If electrically driven thrusters are a vital part of the control equipment they would have at least two generators running during "manoeuvring"?

Can we get Buttfly on board for his expertise?

A similar incident with the same ship apparently occurred in 2019 on the Elbe in Hamburg. The giant freighter rammed and smashed a small ferry that was moored on the bank. There was no one on board the ferry.

Originally Posted by Klondyke

There are big concerns about not only the empty shelves in Germany and East Coast hungry department stores (and Amazon online) but also about the price of oil.
It plays in hands of dangerous Mr. Putin who exports so much to US (Russia 3rd biggest US oil import?)

So, who needs the Nordstream 2?

The dumb Krauts are in their 3rd lockdown which will be followed by a 4th-5th-6th-etc. , so need to rush.

This is going to be the biggest problem.

cases of Heineken beer

Originally Posted by Klondyke

Perhaps NY times reposted what somebody posted here 3 days ago:

Don't complain to me if NYT did not give you credit.

Originally Posted by Klondyke

Perhaps NY times reposted what somebody posted here 3 days ago:

Yes, I am sure that the NY Times follows your posts and reposts them to the world!

Originally Posted by TheRealKW

Yes, I am sure that the NY Times follows your posts and reposts them to the world!

Fortunately, the NYT did not repost any of the Jack-in-box I am having such a large collection from you...

Originally Posted by HermantheGerman

The dumb Krauts are in their 3rd lockdown which will be followed by a 4th-5th-6th-etc. , so need to rush.

So you are actually Herman the Hawaiian ?

Originally Posted by misskit

eight tugs were working to move the vessel, which got stuck diagonally across the single-lane southern stretch of the canal

I am always in favour of using tugs with all hands on deck to pull it off but in this situation would it not be better to use hydraulic jacks to push it off the sand banks?

Using the canal water for purchase in applying the tug force cannot be as effective as using the firm ground of the bank surely?

Or are these tugs anchored to the opposite shore and using hydraulic pulleys?

or both?

But I am guessing they already thought of that...

Originally Posted by Looper

hydraulic jacks to push it off the sand banks?

I am afraid that the sand banks around do not substantiate a sufficient firm base for supporting the jack, do they?

Originally Posted by TheRealKW

or both?

But I am guessing they already thought of that...

Don't forget where they are...

Isn't air bags the go to in this situation

Originally Posted by harrybarracuda

Don't forget where they are...

Don't forget with what kind of people you're dealing with..."The Mother of all Crisis"
Didn't they say, that is won't take a week

Could Russia Benefit From the Suez Canal Blockage?

Almost $300 million worth of Russian oil products are waiting to enter the Suez Canal, which remains closed following the grounding of the Ever Given container ship. But Moscow is hoping it can turn the freak grounding into long-term gain.


Efforts to dislodge the vessel are now in their third day and those tasked with moving the container ship have warned there will be little progress before next week, with some estimating the ship could be stuck well into April.
Goods worth a total of $10 billion pass through the canal — which cuts 15 days off the journey time for vessels travelling from Europe to Asia — every day, accounting for 12% of global trade.


Russia, as the biggest exporter of crude oil products through the canal, has been badly affected. On an average day, Russia ships 546,000 barrels of oil through the canal, energy analytics firm Vortexa calculates. That amounts to around 5% of Russia’s total oil production, with a market value of close to $35 million.


There are already six oil tankers travelling from Russian ports stuck in the congestion, Arthur Richier, senior freight analyst at Vortexa told The Moscow Times. They are carrying 3.2 million barrels of crude oil — worth approximately $195 million — and 1.2 million barrels of clean petroleum product Naphtha worth another $95 million.


“Naphtha is the big one,” Richier said. “Asian refiners are in dire need of Naphtha, and they really like Russian Naphtha. Over the last 15 months, an average of around 240,000 barrels of clean petroleum products have gone from Russia to the Middle East and Asia every day. So it’s going to impact a crucial supply route to Asia.”

So far Asian refiners have been drawing down their inventories as they wait for delayed shipments from Russia and other European ports to arrive, analysts at OANDA said in a recent note.


The congestion has put oil prices on the front foot after a recent retreat amid concerns over fresh spikes in coronavirus infections in Europe. Benchmark Brent crude oil was up more than 3% to $64 a barrel in trading Friday.


Mapping data shows many ships have already decided to avoid the canal and take the longer journey around the southern tip of Africa. With chartering costs for container ships standing at $25,000 a day, ship owners and delivery firms are crunching the numbers to see what makes sense — wait out the delay, or head south.


Other empty Russian ships have been held up on their return journeys, including at least three Novatek gas-carrying vessels, the Kommersant business paper reported Friday.


Northern Sea Route
Despite having almost $300 million of oil products already caught up in the congestion in just the first 72 hours, Moscow is hoping it can turn the freak grounding into long-term gain.


Officials have already started aggressively promoting Russia’s Northern Sea Route (NSR) — an alternative Europe-to-Asia sea route which traverses the Arctic. The route cuts journey distances between China and Europe by 40%. While traffic has grown in recent years, it has not yet proved a challenger to the Suez Canal, or even sailing around Africa.


However, this delay could change that, and Russia is using the opportunity to tout fresh infrastructure development for the route.


“Obviously it's necessary to think about how to efficiently manage transportation risks and develop alternative routes to the Suez Canal, first and foremost the Northern Sea Route,” Russia's ambassador-at-large Nikolai Korchunov told the Interfax news agency Friday.

Climate change is likely to prove a key factor in the NSR’s viability as an alternative — with higher temperatures expanding the number of days ships can traverse the route without the need to be accompanied by expensive and slow icebreakers.


In what analysts at the Russian Academy of Sciences’ Institute of Economic Forecasting dubbed an “optimistic scenario,” Russia could triple freight along the NSR in the next four years to 92 million tons if Arctic ice continues to retreat — a development which has concerned environmentalists.


Nevertheless, that would barely make a dent in Suez Canal traffic, which handled almost 1.2 billion tons of freight last year.


“The Suez accident is a net positive for Russia's efforts to expand direct pipeline routes to Europe, especially for gas, and to promote the Northern Sea route,” Macro Advisory founder Chris Weafer told The Moscow Times.


“But it is by no means a game changer. One accident is not going to change trade routes. Accidents can happen anywhere and at any time.”


Nord Stream 2


A more important win for Russia than the NSR could be the possibility of the Suez incident helping Russia restore its energy relations with Europe.


Despite geopolitical arguments and controversy over the Nord Stream 2 gas pipeline, Moscow values its reputation as a reliable supplier of both oil and gas to the European markets. Russia accounts for more than 40% of Europe’s gas imports and 27% of its petroleum, according to official EU statistics.


In the context of a major hold-up of deliveries from the Middle East, that could help Russia boost sales of both to Europe.


“One possible positive for Russia is if European refiners can’t get their crude from Saudi Arabia or Iraq,” said Richier. “Russia’s Urals blend is a very good substitute. We can assume European refiners are going to go to Russia’s ports in the Baltic Sea and Black Sea and start buying Urals.”


That could push prices up and provide an extra fillip to the Russian budget, which is already benefiting from oil prices, in rubles, being close to their highest levels for three years.


“The real benefit may be to the Nord Stream 2 and Turk Stream 2 routes, especially at a time when the former is under such intense political scrutiny on both sides of the Atlantic,” said Weafer.

Moscow’s decision makers will be hoping the same, as opposition to Nord Stream 2 has reached deafening levels since the jailing of Kremlin critic Alexei Navalny in January.


Officials are already promoting the controversial pipeline in the wake of the Suez blockage.


“This clearly demonstrates the advantages Russia has a supplier of gas to Europe,” Konstantin Simonov, head of Russia’s National Energy Security Fund told Rossiyskaya Gazeta, the official Russian government news site Friday.


Since Europe buys significant amounts of gas from the Middle East, analysts expect the continent to inevitably turn to Russia to help fill any short-term gap. The Kremlin will be hoping that gives them a chance to showcase their benefits as a close, competitive and secure energy exporter, despite U.S. threats of sanctions and fierce opposition in Europe.


“Pipelines are rarely disrupted and have always been by far the most reliable transport mechanisms,” said Weafer.


“The Suez accident provides a very timely reminder of that fact.”

Could Russia Benefit From the Suez Canal Blockage? - The Moscow Times