Ever Given — No Longer Blocking Traffic, But Still Stuck in the Canal

Posted on by April 13, 2021

The Ever Given no longer blocks traffic in the Suez Canal but, in a very real sense, the ship is still stuck in the canal. The ultra-large container ship ran aground for about a week in late March, blocking ships transiting the canal in both directions. Although the ship was freed on March 29th and is currently at anchor in the canal’s Great Bitter Lake, it is not allowed to leave until unspecified damages are paid, according to officials with the Suez Canal Authority. While the shipowner has not officially heard from Egyptian authorities, there are reports that the claimed compensation could reach $1 billion.

“The vessel will remain here until investigations are complete and compensation is paid,” Lt. Gen. Osama Rabie, who leads the Suez Canal Authority, told a local news station, according to the Wall Street Journal.

Even when the ship is finally allowed to sail, the cargo owners could be left waiting for some time before they receive their cargo. The shipowner, Japan’s Shoei Kisen Kaisha Ltd., has declared a general average.

General average is one of the oldest tenets of Admiralty Law, dating back to at least 800 BC. In its original form, when cargo needed to be thrown over the side to prevent a ship from sinking, the principle of general average was that the other cargo owners would share in the loss.

In the case of the Ever Given, the declaration of a general average means that shippers will be required “to share the relevant expenses incurred in the rescue,” the Evergreen spokesperson explained. The general average terms are outlined in a shipment’s bill of lading and can cover a long list of expenses, including towing and salvors.

The most recent large container vessels to declared a general average have involved fires. In 2018 following a cargo fire aboard the Maersk Honam, the owner declared general average. The fire happened in March and shippers were able to pay to release their cargo by May.

More recently, in January 2019,  a cargo fire aboard the container ship Yantian Express prompted Hapag-Lloyd to declare a general average. In January 2020, Ocean Network Express Holdings declared a general average on the container ship Northern Jupiter, following an engine room fire.

“Shippers with cargo aboard the MV Ever Given will be in for lengthy waits for their containers to be released,” the International Federation of Freight Forwarders Associations said in a recent note.

Thanks to Alaric Bond for contributing to this post.

Comments

Ever Given — No Longer Blocking Traffic, But Still Stuck in the Canal — 12 Comments

  1. From a friend:
    “The cargo owners will have insurance so eventually if general avg is proven, and not negligence or any other culpability it will all come back to the insurers. I guess that a priori, they have to prove that it was an accident and not the fault of the ship and its operators.”

  2. One wonders if the crew will become yet another held hostage by our spate of misfortunes.

  3. Doug, my guess is that the crew will be OK. The ship is owned by Shoei Kisen Kaisha, Ltd., chartered to Evergreen Marine and managed by the German ship management company Bernhard Schulte. The claims are being made against the owner. At least so far, the ship manager and the crew hired have not been party to the various lawsuits.

  4. Am I right that the cargo owner can insure against general average but if he doesn’t and refuses to cough up his cargo is forfeit?

  5. Yeah, Rick. I was thinking more of joining other crews stranded on ships due to lack of rotation. But perhaps these were already in that jamb, come to think of it.

  6. Oh joy. The filter down effect will raise more costs. We may not be paying for it now, yet we will in time. Isnt life wonderful????

  7. Unsure of how ships navigate the canal. Yet if the ship required tugs to get through the canal. Maybe it is the canal authority that is to blame for underestimating the amount of control required to steer the vessel.

    Just armchair speculating

  8. Willy your armchair speculating raises an excellent point. However the SCA will never admit that it could be wrong! As one can see from the “hostage” situation being used, once again, the SCA investigation will no doubt place all blame on the vessel and crew. There are two other vessels currently being held one for over a year and a half.

    Egyptian Law is based on the Napoleanic Code with both secular and religious courts. Family Law is divided between Islamic, Christian and Secular courts. The Law plays an important part in Egypt’s political process which in turn is highly influenced by its religious authority.

    One might think that the attitude and behaviour of the SCA will in the long term work against itself. Shippers already encouraged by Russia will consider using the Northern Route with its excellent pilots and icebreaker escorts available already if needed.

    Good Watch.

  9. What do ya’ll make of the route taken just prior to entering the canal?
    Could the navigation system have been hacked to ram the front in so deeply at full throttle?
    What if some of the reported animals aboard were actually humans being trafficked?

  10. There were no animals aboard the Ever Given and the ship did not hit the bank at full throttle by all accounts. QAnon rumors are a waste of time.

  11. Thankyou for your policing Rick. Too bad you cant remove the absurd fantasies. Oh well.