The Ever Given is free, but questions remain about the role of the Suez Canal in global trade

0
48



And then, with nearly the same suddenness as its stranding, the Ever Given was moving again, toward another part of the canal, the Great Bitter Lake, where it is now docked and awaiting inspection.

Hundreds of ships that had been stuck waiting can resume their journeys, reviving a key artery for global trade, as the backup slowly clears.

But for the global shipping industry, the saga isn’t over. While freeing the ship was a colossal effort, in some ways what happens next is the hard part, as experts reexamine fundamental assumptions about shipping and world trade.

There are immediate questions under investigation, and thorny issues of liability, but longer-term concerns loom. The canal has long been a geopolitical chokepoint. But the events of the past week have lent new weight to questions about whether the canal is too vulnerable in a world of changing weather, terrorism and other emergent threats.

Egyptian President Abdel Fatah al-Sissi, visiting the Suez Canal Authority in Ismailia on Tuesday, said that the event had demonstrated the “reality and importance” of the canal. “We didn’t hope for something like this, but fate was doing its work,” he said.

Losses and liability

Investigators boarded the Ever Given on Tuesday, hoping to assess damage and find out what went wrong when the ship became stuck.

The earliest suggestions were that the ship, covered with containers that acted like a sail, had been blown off course during a dust storm that day. But Lt. Gen. Osama Rabie of the Suez Canal Authority told reporters this weekend that human and technical errors cannot be ruled out.

Some scrutiny has fallen on the ship’s two Egyptian canal pilots, who came aboard the Ever Given to help guide it through the canal, as is standard..

Gregory Tylawsky, a captain with the California-based Maritime Expert Group, said that the investigation would include data from the vessel’s voyage data recorder, which might include important details not available publicly.

“The maritime industry has a very good track record in efforts to increase safety and learn from incidents,” Tylawsky said. For instance, after the 1989 Exxon Valdez oil spill, U.S. lawmakers led a global push for safer, double-hulled boats.

Particularly tricky will be the issue of liability. The ship is owned by Japanese company Shoei Kisen Kaisha Ltd. but operated by a Taiwanese firm, Ever Green Marine Corp.

But the ship sailed under a Panamanian flag, which means Panama will handle the investigation into its grounding. Alternatively, Egypt could ask to take over the inquiry.

Even if the pilots were found to be at fault, Egyptian law makes it clear the liability does not lie with them and that the captain has responsibility for the vessel even when they are on the ship.

Damage to the ship, which is still carrying roughly 20,000 containers, will need to be factored in, especially if there are any structural problems to the ship caused during its complicated refloating efforts.

The grounding of the ship disrupted billions of dollars of trade, and analysts have estimated it might take another 10 days to clear the backlog, potentially setting up the ground for lawsuits and legal battles.

Long-term changes

The incident raises deeper questions about the viability of the current setup of the Suez Canal. Some 15 percent of global shipping traffic passes through the waterway each year, according to Moody’s Investors Service, and the canal has been vital to trade for over a century.

But as trade has increased and ships have become far larger, the logistics of traversing the canal have become more complicated. A high-ranking canal pilot working for the Suez Canal Authority said that this was a real issue and that winds affected the larger ships’ course more than smaller ones.

“The ships today are bigger than they used to be,” the pilot said. “This is something new. We haven’t seen this before.”

At 1,312 feet long, the Ever Given is the maximum length permitted in the canal. At an estimated 200,000 tons, one shipping salvage company to compare it to an “enormous beached whale” when it became wedged across the waterway.

Egypt renovated the canal just six years ago, spending over $8 billion to deepen the main waterway and digging new pathways to allow two-way transit in some parts. The high price tag drew a critical response from some in the country, who argued that the money could be better spent on public services.

Genevieve Giuliano, a professor at the University of Southern California’s Sol Price School of Public Policy who has served as an adviser to the U.S. Department of Transportation on freight logistics, said last week that the industry could eventually shift away from the largest ships.

But “ports around the world have spent enormous amounts of money to accommodate” these massive ships — digging deeper channels and buying larger cranes, for example — and in the past the shipping market seemed ready to accommodate the risk because of the cheaper costs offered by those vessels.

That could begin to change, Giuliano said. “Nobody likes risk because risk is money. What this is telling us is that we kind of underestimated the risk of going through the Suez Canal.”

Some shippers may now assess that even though the route around the Cape of Good Hope in South Africa — which the Suez was built in the 19th century to circumvent — can take weeks longer, the lower risk may be worth it.

The broader environment could be changing, too. Russian officials have already seized on the Suez Canal blockage to promote its Northern Sea Route, which has recently become a more plausible shipping route due to the impact of global warming.

“The incident in the Suez Canal should make everyone think about diversifying strategic sea routes amid the increasing scope of sea shipping,” Nikolai Korchunov, Russia’s envoy for international cooperation in the Arctic, said on Friday.

“The Ever Given incident has highlighted the increased risk levels and new threats associated with large maritime assets transiting this chokepoint in world trade today,” Tylawsky said.

After a thorough investigation, the world will expect that “all parties will work to amend their operational environments so that this never happens again,” he added.

Antonia Noori Farzan contributed to this report.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here