High Winds, Poor Decisions, Pilot Error

High desert winds, poor judgement, and lack of tugboats led to this trade blockage fiasco. As a result, $10 Billion of Global Trade is Off Course.

The forecast for Tuesday, March 23, showed wind gusts of more than 40 miles per hour and sand storms sweeping through northern Egypt. Indeed, such weather is common in the Sinai desert at this time of year.

Ships were starting to form the daily convoy as the gusts picked up. One of the world’s biggest container vessels, the Ever Given, joined it. The decision would reverberate globally within hours.

By 7:40 a.m. local time, the megaship—loaded with containers that would stretch more than 120 kilometers (75 miles) end to end and carrying everything from frozen fish to furniture—was stuck.

Most of the nearly 300 vessels currently awaiting to pass through the backlogged canal likely don’t have perishable goods or delay coverage. That means the vessels remain on hire and the charterers may be responsible for paying for the rates even as they’re stuck in the traffic jam.

No Tugboats, Bad Decisions, Speed, Loading

  • No Tugs: The Ever Given  didn’t employ tug boats, according to two people with knowledge of the situation, while the two slightly smaller container ships immediately ahead did.
  • Poor Visibility: The Rasheeda was among the ships approaching the canal from the southern end. Mindful of the dangers of the coming sandstorm and laden with liquefied natural gas from Qatar, the captain decided not to enter the canal after discussion with other officials at Royal Dutch Shell Plc, which manages the ship
  • Speed: The ship’s last known speed was 13.5 knots at 7:28 a.m., 12 minutes before the grounding, according to Bloomberg data. That would have surpassed the speed limit of about 7.6 knots (8.7 miles an hour) to 8.6 knots that is listed as the maximum speed vessels are “allowed to transit” through the canal, according to the Suez authority’s rules of navigation handbook posted on its website. Captains interviewed for this story said it can pay to increase the speed in the face of a strong wind to maneuver the ship better.
  • Escorts Not Mandatory: The Cosco Galaxy, a container ship marginally smaller than the Ever Given, was immediately ahead and appears to have travelled at a similar speed, though with a tugboat. The one ahead of the Cosco, the Al Nasriyah, also had an escort. The escorts are not mandatory, according to the Suez authority’s rules of navigation, though the authority can require it for ships if they deem it necessary.
  • Cargo Load: A cargo ship with containers stacked high like the Ever Given can be particularly hard to navigate since the ship’s hull and wall of containers can act as a huge sail, said Kinsey, the former captain, who made his last trip through Suez in 2006 . “There’s a very fine line between having enough speed to maneuver and not having too much speed that the air and hydrodynamics become unstable. Any deviation can get real bad real quick because it’s so tight,” said Kinsey.

Legal Battle Looms

The Wall Street Journal reports Suez Canal Insurance Claims Loom as Ever Given Blocks Shipping

More than $3 billion of insurance is in place for liability claims against the owner of the grounded container ship Ever Given, officials with its insurance program said Friday.

It is unclear whether that will be enough to cover losses that are likely to be claimed by some of the more than 200 ships in the canal as of Friday, plus the owners of the cargo they are carrying, if the vessel continues to block the Suez Canal, industry executives said.

Some ship and cargo owners could end up filing claims with both their own insurers and Ever Given’s insurer—and ultimately suing the container ship’s owner—to receive compensation.

Standard cargo policies protect against lost or damaged goods, not the costs of delays, said Michael Pellegrini, who oversees the North American marine-insurance practice at Marsh. Many cargo owners forgo the additional, expensive coverage for delays, he said.

Not the First Ever Given Accident

Wikipedia notes: On 9 February 2019, the ship struck and heavily damaged a 25-meter-long HADAG ferry boat at Blankenese, near the harbour of Hamburg. Two minutes after the collision, a traffic ban on the Elbe river was issued due to high winds.

Risk of Breaking Up

The blockage might turn into a massive obstruction as Risks of the Ship Breaking Up increase.

“While we believe and hope the situation will get resolved shortly, there are some risks of the ship breaking," JPMorgan's Marko Kolanovic wrote in a note to clients on Thursday.

"In this scenario, the canal would be blocked for an extended period of time, which could result in significant disruptions to global trade" — including soaring shipping rates and commodities prices, which may nudge up global inflation, he said.

On Friday, German insurance giant Allianz estimated the blockage could cost global trade at least $6 billion per week, a price tag that could spiral higher if it drags on for days, if not weeks.

Resolved When?

RECOMMENDED ARTICLES

Marko Kolanovic's belief that the "situation will be resolved shortly caught me by surprise given these headlines.

Days or Weeks to Clear

Massive cargo ship still stuck in Egypt’s Suez Canal could take ‘weeks’ to clear is the consensus. 

Big Tugs, Tides, and Dredgers to the Rescue?

CNN reports Fresh Bid to Dislodge Stranded Suez Canal Container Ship Gets Under Way.

It is now hoped that tug boats can make use of the winds and tides Saturday to dislodge the 224,000-ton ship, the head of the Suez Canal Authority (SCA), Osama Rabie, told Egyptian news outlet Youm7.

The US Navy in the Middle East also plans to send an assessment team of dredging experts to the Suez Canal as soon as Saturday to advise local authorities attempting to free the gigantic container ship, according to two US defense officials.

Peter Berdowski of Boskalis, a sister company of Dutch firm SMIT Salvage, told Dutch TV newscast "Nieuwsuur" that their Plan A is to try to wrest the ship free without removing containers from the deck.

"There are two heavy tugboats on their way," he said Friday evening. "Together they have a pulling power of about 400 tons. So those are really big guys. They arrive this weekend."

Most importantly, he said, a more thorough investigation has shown that the ship's stern is "not entirely pushed into the clay." That would allow tug boats to take advantage of lever power by pulling at the stern, he said.

He said the hope is that their pulling power -- combined with dredging work now underway, a high tide of 40 to 50 centimeters next week, and the "lever power" of the ship's stern being relatively free -- would be enough "to release the ship sometime early next week."

If that fails, Berdowski also laid out a plan B.

"In parallel, we are already mobilizing a crane," he said. "This will also be delivered this weekend, which will enable us to remove containers from the front of the ship."

High Tides and Full Moons

Spring Tides

None of the above articles mentioned why they expect tides to be high. 

Earth Sky explains the Pull of the Sun and the Moon.

What are spring tides? 

Around each new moon and full moon, the sun, Earth, and moon arrange themselves more or less along a line in space. Then the pull on the tides increases, because the gravity of the sun reinforces the moon’s gravity. In fact, the height of the average solar tide is about 50 percent of the average lunar tide.

Thus, at new moon or full moon, the tide’s range is at its maximum. This is the spring tide: the highest (and lowest) tide. Spring tides are not named for the season. This is spring in the sense of jump, burst forth, rise.

So spring tides bring the most extreme high and low tides every month, and they always happen – every month – around full and new moon.

Next Full Moon

The next full Moon will be Sunday afternoon, March 28, 2021, appearing opposite the Sun in Earth-based longitude at 2:48 PM EDT.

Best wishes to the moon, the Ever Given, dredgers, high tides, and big tug boats.

Mish