image Photo: Reuters

Suez jam costs Canal $14-15 million daily

The Suez Canal Authority (SCA) has announced that the huge container ship blocking Egypt’s critical waterway for nearly a week has been partially refloated.

High winds lodged the 400-meter (430-yard) long Ever Given diagonally across a southern section of the passageway early last Tuesday – halting traffic on the shortest shipping route between Europe and Asia.

Two marine and shipping sources confirmed that dredging and excavation over the weekend by the SCA and the Dutch Smit Salvage firm managed to free the ship early this morning with the use of tugboats.

The SCA said Ever Given has been mostly straightened along the eastern bank of the canal and further tugging operations will be resumed later today after the tide has risen. The ship is nevertheless still stuck in the mud. Rescuers are considering the blasting of high pressure water under the bow to remove sand and clay, and 2 more powerful tugboats are set to arrive today.

“We have movement, which is good news. But I wouldn’t say it’s a piece of cake now,” Peter Berdowski, the CEO of Smit Salvage’s parent company Boskalis, told Dutch public radio.

2 SCA sources told Reuters that a mass of rock had been found at the bow of the ship, complicating salvage efforts.

Naval traffic is expected to resume after the vessel is able to move toward a wider lake section of the canal. SCA Chairman Osama Rabie said on Egyptian state television there are at least 369 vessels were waiting to transit through the canal, including dozens of container ships, bulk carriers, oil tankers and liquefied natural gas (LNG) or liquefied petroleum gas (LPG) vessels. The SCA plans to accelerate convoys through the canal once the Ever Given is freed.

While Rabie said it could take between 2-3 days to clear the backlog, the Maersk shipping group estimates it could take weeks or even months for the recovery the disruption caused to global shipping.

Shipping rates for oil product tankers nearly doubled after the ship became stranded, and the blockage has disrupted worldwide supply chains, threatening costly delays for companies already struggling to cope with COVID-19 restrictions.

Maersk said that at least 5 vessels rerouted their cargoes around the Cape of Good Hope, which will add 2 weeks to the voyages as well as additional fuel costs.

Crude oil prices dipped after the progress in refloating the ship, with Brent crude down around $0.45 per barrel to $64.12. Shares of Taiwan-listed Evergreen Marine Corp – the vessel’s lessor – rose 1.75%.

About 15% of world shipping traffic transits the Suez Canal, which is an important source of foreign currency revenue for Egypt. The stoppage is costing the canal $14-$15 million a day.