Six days that blocked the Suez Canal

On the morning of Tuesday 23 March 2021, a container ship called Ever Given hit the bank of the Suez Canal and swung sideways. Within hours it was wedged across the waterway, bow in one bank and stern in the other. The canal was shut. It stayed shut until Monday 29 March, when tugs and dredgers freed the hull and it floated clear. Six days. Hundreds of ships waited.

The ship, in plain numbers

Ever Given is about 400 metres long and roughly 59 metres wide. It belongs to the class of container ships that carry around 20,000 twenty-foot boxes (TEU), among the biggest afloat. The vessel is owned by a Japanese company and was operated by Taiwan’s Evergreen Marine, and it was sailing from China towards Rotterdam, in the Netherlands.

Put it on its end and it would be taller than any building in Panama City. Lay it across a narrow canal and you have a problem that no single tug can fix.

What went wrong

The ship was in the southern stretch of the canal, a single-lane section, when strong winds and poor visibility from a sandstorm hit. Reports at the time pointed to the wind and the ship’s size acting like a sail on a vessel that stacks containers high above the deck. The exact causes were investigated afterwards by the canal authority and others, and it is better to leave that question to their findings.

What mattered in the first days was the geometry. The bow dug into the sandy bank. Digging it out meant moving a great deal of material around a hull of that weight.

Why the canal matters so much

The Suez Canal links the Mediterranean and the Red Sea. It saves a ship sailing between Asia and Europe the long trip around the Cape of Good Hope at the southern tip of Africa, which adds roughly a week or more at sea. The canal is often cited as carrying around 12% of world trade, and a considerable share of the container traffic between Asia and Europe passes through it. Oil and gas tankers use it too.

It is a narrow route by necessity. Large parts are single lane, with passing places and convoys timed to keep traffic moving. That design works until one ship stops.

The queue

Ships backed up at both ends and in the waters nearby. By the time the canal reopened, several hundred vessels were waiting, carrying everything from containers to crude oil to livestock. Others turned around before the end.

Some carriers rerouted vessels around the Cape of Good Hope instead. That trip burns more fuel and adds days to the voyage, and it is a decision that is easy to describe and costly to make. The ones that stuck it out were released within days of the refloating, so the detour was not always the faster choice.

What it did to schedules and equipment

When the ships were freed, they did not arrive in order. They arrived in a bunch. Ports in Europe received waves of vessels in a short window, and terminals that could handle a steady flow found themselves with a pile of boxes to move all at once. Trucks, rail slots and yard space ran short.

The effect also ran backwards through the system.

• Containers that were supposed to be back in Asia stayed on the water or in port queues, which kept equipment scarce at the origin. This added to the shortage already hurting exporters in early 2021.
• Sailing schedules that had been uneven now slipped further, and carriers cancelled or merged some departures to recover.
• Shipping lines had a harder time keeping promised departure dates, which pushed back cargo for importers who had nothing to do with the canal.

A closure measured in days took weeks to unwind.

General average and insurance, briefly

Within days of the refloating, a term that most importers had never needed came into the conversation: general average. It is one of the oldest ideas in maritime law. When a ship’s master makes a sacrifice or spends money to save the voyage, say by dumping cargo or paying for a salvage tug, the cost is shared among everyone with something at stake, in proportion to the value of what each party had aboard. The ship owner pays a share, and so does each cargo owner.

The practical sting is that cargo may be held until its owner signs a guarantee to pay. A bill can arrive for a company whose containers were never touched. The owners of Ever Given were reported to have declared general average in the weeks after the grounding.

This is why marine cargo insurance exists. A standard policy usually covers a general average contribution, and the insurer typically provides the guarantee so the cargo can be released. Whether you carry that insurance depends on the trade terms you bought on. Under some terms the seller arranges the cover, under others the buyer does, and under many the buyer simply has none unless they ask for it. Read your sales contract and check.

The lesson for importers

One ship held up a share of world trade. That sounds extreme, but the underlying point is ordinary: trade runs through a small number of narrow places, and any one of them can fail. The Suez Canal is one. The Panama Canal is another. So are certain straits and a short list of very large ports.

Cargo from China to Panama does not normally use Suez, so most of the direct impact missed this market. But rates, equipment and schedules are connected, and a shock in one corridor moves prices and boxes in another.

A few habits help.

1. Build buffer time into delivery dates for anything tied to a sale or a production run.
2. Do not hold all your supply on a single route when an alternative exists.
3. Ask your forwarder what happens to your booking if a route closes, who pays for the reroute, and how fast you will be told.
4. Check that your cargo insurance includes general average and covers the full invoice value plus freight.

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