Suez Canal Authority Says Partial Floating Of Cargo Ship Blocking The Suez

There was a glimmer of hope for the Suez Canal crisis after rescuers managed to partially refloat the stranded giant container ship that is blocking the canal on Monday after it had got stuck in the canal last Tuesday blocking ship movement across the canal both ways and brought a vital global trade route to a standstill.

The ship, known as the Ever Given, has “responded to the pulling and towing maneuvers”, said the Suez Canal Authority in a statement.the salvagers have managed to correct the ship’s course by 80 per cent and further maneuvers will be undertaken after rise in the water levels in the canal, the statement said.

There was not clarity however on the present condition of the ship and when the canal could be reopened for traffic. Resumption of maritime traffic can only be possible after the stranded ship is fully floated and directed to the lakes area which is a wider section of the canal, where technical inspection of the ship would be carried out, the Suez Canal Authority said.

Prior to the statement, a tweet was published by maritime services company Inchcape which said that the ship had been refloated and was being secured.

It has been almost a week that efforts of freeing the huge liner have been underway since the ship got stuck diagonally last Tuesday after running aground while entering the Suez Canal from the Red Sea.

With a weight of 220,000-ton, a length of almost a quarter-mile long and a carrying capacity of 20,000 containers, the Ever Given is one of the largest container ships in the world.

The Suez Canal is used for as much as 12 per cent of the seaborne trade of the world. The blockade has resulted in a traffic jam of container vessels on both side of the canal with ships waiting to enter the Suez.

Following the blockade, there are at least ten tankers and container ships that have changed course to avoid the logjam at the Suez Canal, according to reports quoting maritime data. Cheniere and Shell/BG Group are among those that are changing course because of the size crisis.

There have been growing concerns about the global supply chains of companies which had already been upended by the Covid-19 pandemic related crisis. According to Lloyd’s List, goods worth more than $9 billion have been affected each day by the blockade which is equivalent to disruption of transportation of goods worth about $400 million per hour.

There could be long term ramifications of the blockage said the largest container shipping company of the world Maersk in an advisory issued on Monday.

“Even when the canal gets reopened, the ripple effects on global capacity and equipment are significant and the blockage has already triggered a series of further disruptions and backlogs in global shipping that could take weeks, possibly months, to unravel.”

The blockade of the Suez Canal and the consequent disruption to global shipping “is likely to cause a large loss event for the reinsurance industry”, said Fitch Ratings in a warning on Monday.

“The ultimate losses will depend on how long it takes the salvage company to free the container ship completely and when normal ship traffic can resume, but Fitch estimates losses may easily run into hundreds of millions of euros” it said.

(Adapted from CNBC.com)



Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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