Suez Canal Blockage Forces Operators to Reroute Ships

SUEZ CITY, Egypt —The operator of the ship blocking the Suez Canal said it would take at least two or three more days to dig the vessel out of the waterway’s bank, while other ship operators began rerouting tankers and containers—in some cases sending them on a two-week extended voyage around the southern tip of Africa.

Dredgers were working again Friday to remove hundreds of thousands of cubic feet of sand around the bow of the 1,300-foot Ever Given, operated by Taiwan-based Evergreen Group, according to the Suez Canal Authority. In a statement, Evergreen said a salvage team that the ship’s owner assembled is continuing to clear sand and mud around the ship’s bow in order to try and free the vessel during high tide. It said it would take “at least two to three days to reach the required depth for the stranded ship to refloat.”

Re-Route

Shipping companies with vessels idling in or near the Suez Canal are considering taking a detour around Africa. The Cape of Good Hope route is considerably longer and burns more fuel, making it less popular than the Suez Canal option.

Major world shipping routes

Example: Singapore-Rotterdam, Netherlands

Major world shipping routes

Example: Singapore-Rotterdam, Netherlands

Major world shipping routes

Example: Singapore-Rotterdam, Netherlands

Major world shipping routes

Example: Singapore-Rotterdam, Netherlands

An attempt to re-float the vessel earlier Friday wasn’t successful, according to the ship management firm for the vessel. It said a specialized suction dredger, which can shift large volumes of material, arrived on site on Thursday.

Earlier in the day,

Yukito Higaki,

the president of Imabari Shipbuilding Co., whose group of companies includes the ship’s owner, Shoei Kisen Kaisha Co., said at a news conference in Japan that workers had hoped to dislodge the ship by Saturday. “We’re putting priority on dislodging the ship so that the blockage of the canal can be resolved,” Mr. Higaki said.

More diggers are being brought in and salvage teams are making plans to siphon out fuel and ballast water to lighten the ship, according to one person involved in the operation.

“It’s a difficult process. The ship’s bow is still wedged in the canal wall and there could be some structural damage,” this person said. “If you try to yank it out, things could get worse and fuel could spill out. It’s the worst place in the canal for such a big ship to be stuck.”

Meanwhile, shipping companies have reported more than 300 idled vessels on either side of the canal, which links the Mediterranean Sea with the Red Sea and is a crucial waterway for global trade and energy shipments. For days, as Egyptian authorities tried to clear the canal, shipowners and operators have debated whether to reroute—adding weeks and tens of thousands of dollars to the cost of voyages—or wait for the canal to free up again.

Many shipowners have now decided to reroute. Early Friday, the Ever Greet, a sister ship to the Ever Given, was rerouted away from Suez and toward Africa’s Cape of Good Hope, according to MarineTraffic, a shipping tracker. The vessel was sailing from Malaysia to Rotterdam.

“It was supposed to go through Suez…it’s going [via] Cape Town now,” said a manager at the Ever Greet’s owner, Nissen Kaiun KK.

Ships are seen at the entrance of the Suez Canal on Friday.



Photo:

mohamed abd el ghany/Reuters

Two other container vessels, one headed from Rotterdam and another from the U.K., abruptly changed course from an earlier track through the Mediterranean, according to MarineTraffic. A crude tanker and several giant tankers carrying liquefied natural gas have all changed course in recent hours, and are now heading to the Cape of Good Hope, according to ship trackers.

Most vessels that were already close to the canal are now crowding the waterway’s two entrances. So far, most of these ships are holding tight. Analysts said the longer sailings will further scramble the world’s carefully choreographed ballet of container-based shipping.

While European and Asian businesses are likely to feel the brunt of the disruption, importers in the U.S. could also feel an impact. Demand for containers and berthing space soared late last year and into this year, well before the Suez crisis. Backups in container ports, especially along the West coast of the U.S., have grown during a normally slack period in shipping demand. That has tied up inventories for weeks in some cases, as ships wait to reach berths while unloaded containers sit for long periods at packed freight terminals.

The Suez blockage “will drastically reduce global container shipping capacity and lead to further delays for American importers to get their orders delivered,” said

Lars Jensen,

chief executive of Copenhagen-based SeaIntelligence Consulting. “This couldn’t have come at a worse time because all ships available have already been deployed.”

Container and cargo ships are pictured Friday awaiting transit through the waterway.



Photo:

Mirette Magdy/Bloomberg News

While customers around the world can expect delays, European ports are also girding for congestions once rerouted ships eventually get into port. Gateways like Antwerp and Rotterdam could see waiting times lengthen significantly, analysts said.

“On the Asia-Europe trade, every ship that is available to shipping lines has been deployed, with vessel utilization effectively 100% following sustained heavy demand,” said Greg Knowler, senior European editor at the Journal of Commerce. “Cargo owners can expect canceled sailings, ports being skipped, and an increase in the amount of cargo rolled over to later sailings.”

The canal closure has also alarmed companies that don’t use the waterway. Russian steelmaker

PAO Severstal

gets the coal and iron ore it uses to make its metal from local sources and the company doesn’t send its finished product through the canal.

“But obviously, freight costs went up everywhere, and we need to calculate how that will affect us,” said

Alexey Kulichenko,

the company’s chief financial officer.

More on the Canal and Global Supply Chains

Write to Rory Jones at [email protected], Benoit Faucon at [email protected] and Costas Paris at [email protected]

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