Giant ‘Ever Given’ ship blocks global trade

Perhaps 200 ships have been unable to pass through the Suez Canal for some 48 hours, as dredgers and excavators struggle to free the massive container vessel.

SIMON BROWN: I’m chatting now with Peter Sand on the line from Denmark. He’s a shipping analyst at Bimco. Peter, I really appreciate your time this morning. The Ever Given ship has been stuck in the Suez Canal for just a little over 48 hours. When I first heard about it I went and did some digging. Fifty ships a day on average go through the Suez Canal. My thought was that’s quite small. But these ships carry: Ever Given carries 200 000 metric tonnes. How much cargo from a global trade perspective is stuck as a result?

PETER SAND: Good morning, Simon. I think the best way to describe how much cargo is basically stuck within the Suez Canal and outside, with the southern and the northern anchorage, is that we soon have 200 ships, I guess more depending on how you count it, but it encompasses all kinds of ship types. This is not just container ships. Most bulk … is actually around…hangers, general cargo, vehicle carriers, chemical carriers, LPG (liquefied petroleum gas), livestock carriers as well. 

So this is really the artery of global trade and a key choke point that at this point in time unfortunately is choking. And the world is really watching whether this can get cleared very soon. But this is super-duper busy, and not only at the moment but in particular you mentioned the container ship upfront here. They have been, well, stretching supply chains on a global scale for the past half-year, with the recovery of consumer spending in the US. And this is just making a bad day worse for those importers that are constantly struggling to get their cargoes in due time.

SIMON BROWN: We chatted with you earlier in the year, I think back in January, and it’s been a tough industry already. Is there any sense of how long it’s going to take, or is this one of those things that truthfully we don’t know until suddenly it’s free?

PETER SAND: [Chuckling] Well, I think most people have been surprised upfront by the rumours on Wednesday. Maybe you recall that was ‘okay, now she says she free-floated’, but that turned out to be naturally not correct. We know that. It was just an indication of how much the world would very much like the Ever Given to be refloated, and how much we would like to go back to business as usual with the transit of the canal. 

You mentioned, Simon, that 50 or 55 ships on an average day transit the canal. It doesn’t sound like a lot but the trick is, of course, especially with container shipping if we use that as an example, they are simply getting bigger. It’s a smaller number today than it was only, say, five years ago when I think one-third more in terms of numbers of carrying containers transited the Suez Canal, but now, as you can see, it’s 20 000 CUs (container units) and not only 10 000-CU ships that transit the canal. So size does matter also for container shipping.

SIMON BROWN: And this is a giant ship – 400 metres, 1 000 feet. That’s four rugby fields. It’s incomprehensible in my mind, in terms of that size. If the ship remains stuck, can the other ships say [something] like ‘Let’s go around the Cape’. Is that a viable option in terms of how long that would potentially take and obviously the increased cost of taking the long way round?

PETER SAND: It has already started, Simon. And one of the first things everyone involved in shipping does in a case like this is to put together quite a few contingency plans. The first one has obviously been ditched already because she was not refloated ASAP. Right now they are in, you could call it, stage two, where they are doing whatever they can to single out [whether there] are critical cargoes en route that [they] need to make sure don’t get stuck in line. 

That’s basically what we see right now, both in terms of cargoes being diverted already from the Far East around the Cape of Good Hope, and also empties going back from Europe into the Far East. But I guess that’s basically the inherent part of the red-hot container market that we have seen for half a year now, like empties in the Far East. So how long will this last? Fingers crossed, only a few more days. But obviously, you have dredgers working hard, you have trucks working, and you have excavators – everyone is trying to free her, of course. 

I think the better estimate right now is [for] the end of the weekend, early next week. Hopefully, it will not drag on to several weeks – that will be an outright disaster.

SIMON BROWN: And it’s wild that here we are in global trade. And to your comment, we are crossing our fingers. It is crazy times. 

Peter Sand, shipping analyst on the line from Denmark at Bimco, I appreciate your early morning time, sir.



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