US Navy Heads To Suez Canal To “Assess” Stuck Container Ship After Failed Refloating Attempts

Update (1221): CNN’s Barbara Starr reports the US Navy will send an “assessment team of dredging experts to Suez Canal as soon as Saturday to advise authorities on options to try to free the stuck tanker Ever Given.” Starr said the report was confirmed by two US Department of Defense officials. 

BREAKING: CNN has learned @USNavy expects to send assessment team of dredging experts to Suez Canal as soon as Saturday to advise authorities on options to try to free the stuck tanker Ever Given, according to two DOD officials. Comes after Egypt accepted @USEmbassyCairo offer.

— Barbara Starr (@barbarastarrcnn) March 26, 2021

This comes as multiple attempts to refloat the massive container ship have failed. 

Sports betting website MyBookie is now offering bets on when the container ship will be “declared unstuck” from the canal.

 

 

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Update (1111ET): Maxar Technologies’ satellite imagery shows the dredging attempt around the front hull of Ever Given. 

Here’s another view of the dredging. 

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Update (1039ET): Bernhard Schulte Shipmanagement, the technical manager of Ever Given, said Friday an attempt to refloat the stranded container ship in the Suez Canal “was not successful.” 

AFP reports, “tugboats and dredgers were working on Friday to free the giant container ship which is blocking Egypt’s Egypt’s Suez Canal for a fourth day, forcing companies to reroute services from the vital shipping lane around Africa.” 

AFP published pictures of a giant dredging boat around the front hull of Ever Given. 

Earlier, we noted more than 300 vessels are waiting to traverse the canal. 

A video from a few days back shows a line of vessels (note this was a few days back, the situation is much worse). 

Canal de Suez | #Evergreen

El mayor portacontenedores del mundo, de 400 metros de largo y 59 de ancho, quedó encallado por el viento y una tormenta de arena.

Mas de 100 barcos permanecen a la espera, atentos al precio del 🛢🛢🛢 petróleo.pic.twitter.com/NojPoJWqEI

— 𝐅𝐢𝐧𝐚𝐧𝐳𝐚𝐬 ≜ (@Finanzas_Pharol) March 24, 2021

Some vessels are being rerouted around the Cape of Good Hope as the Suez crisis might continue through the weekend. 

… and what might have to happen if refloating attempts continue to fail is to partially unload the container ship. 

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The world got another wake-up call this week about the overreliance on complex, just-(not)-in-time global supply chains. As of Friday, the massive container ship, “Ever Given,” remains stuck in the canal, unable to be refloated, paralyzing the world’s most important shipping lane. Ever Given is one of the world’s largest container ships, with approximately 20,000 shipping containers of goods, and it has paralyzed one of the world’s most important shipping lanes – a vital linkage between Asian factories and customers in Europe and the US. 

Reuters reports the Suez Canal Authority (SCA) is looking forward to cooperating with the US to refloat the stranded container ship that has blocked the canal since Tuesday. 

“The Suez Canal Authority (SCA) values the offer of the United States of America to contribute to these efforts, and looks forward to cooperating with the US in this regard,” it said in a statement.

Shoei Kisen, the Japanese owner of the ship blocking the Suez Canal, aims to dislodge the vessel from the canal bank by Saturday. But as Bloomberg reports, the process to refloat the ship could “take until at least next Wednesday.” 

Peter Berdowski, CEO of Dutch company Boskalis who has been tasked with dislodging the vessel, warned Ever Given “could be stuck in the canal for weeks.” 

So actual timelines on when the vessel will be unstuck are unclear. The blockage is wreaking havoc across global supply chains, and crude prices were higher on Friday morning on mounting fears the container ship will be stuck for much longer than initially anticipated. Since the container ship got stuck on Tuesday, crude prices have been chopping around 57-handle to 61-handle. 

On Friday, tugboats and suction dredger crews worked around the vessel’s front hull to remove sediment. The task to refloat the 200,000-ton ship may involve removing containers to lessen the vessel’s weight. 

Since Tuesday, tugs and diggers have been unsuccessful in attempting to refloat the stranded vessel. As hundreds of ships pile up on either end of the canal entrances – A.P. Moller-Maersk A/S and Hapag-Lloyd AG have instructed their vessels to take alternative routes to avoid the canal. Vessels have been instructed to reroute around the Cape of Good Hope. 

The canal is one of the world’s most important shipping lanes, with 12% of global trade and 8% of liquefied natgas traverse the canal and nearly two million oil barrels each day. Every day the canal is blocked, it halts about $9.6 billion of trade.

“The number of ships loaded with billions of dollars worth of goods waiting to traverse the canal has risen to more than 300,” according to Bloomberg data.

Reeling from the blockage, marine freight rates are surging this week as companies race to find alternative shipping lanes. 

According to Bloomberg, the cost to ship a 40-ft. container from China to Europe has risen to $8,000, up 4x year-over-year. Suezmax vessels, which carry about 1 million barrels of crude, are now chartering for approximately $17,000 per day, the most since summer 2020. 

Reuters notes the Black Sea to Mediterranean fuel shipping rates rose this week as traders attempt to bypass the blocked Suez canal.

On top of an already stretched global supply chain, manufacturers in Asia are already preparing for extended shipping delays due to the blockage. To get an idea of some of the goods that flow through the canal from the East to West, cargo aboard an HMM Co. vessel moored outside the canal is carrying frozen beef, paper, beer, auto components, chocolate, furniture, frozen pork, and other goods. 

Other reports include Caterpillar Inc. is facing shipping delays because of the canal blockage and is considering air freight for certain parts. 

Mark Ma, the owner of Seabay International Freight Forwarding Ltd., a company that handles Chinese goods including toys, pillows, and mattresses sold on Amazon, has 20 to 30 containers stuck in the canal. 

“If it can’t be resumed in a week, it will be horrible,” said Ma. “We will see freight fares spike again. The products are delayed, containers can’t return to China and we can’t deliver more goods.”

More reports indicate at least 10 LNG vessels from the Middle East with end destinations in Europe have been delayed. 

“Even if the route is liberated within one week, there is a large queue of cargoes lining up to cross the canal,” said Carlos Torres Diaz, Rystad’s head of gas and power markets. “The return to normal flow will take some time.”

The knock-on effects of the blockage are rippling through the global supply chain and is the “worst-case scenario” for global trade.