Liner operators warn of lasting trade disruption as Suez blockage continues

Major liner operators warned on Saturday that congestion issues would continue to plague container trades for some time after the Suez Canal reopens.

The messages came as the 20,388-teu boxship Ever Given (built 2018) continued to block the waterway after it grounded on 23 March, halting traffic in both directions.

Suez Canal Authority chairman Osama Rabie said on Saturday that the ship's propeller and anchor had been freed during refloating efforts, which were to continue "around the clock". But he told reporters that officials could not say when the ship would be successfully refloated.

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A Mediterranean Shipping Co (MSC) executive said the Suez Canal blockage is one of the biggest disruptions to world trade in recent years and that the company is working tirelessly to keep cargo moving as best it can under the circumstances.

"Sailing around the Cape of Good Hope is an option on some routes, while in other cases it’s more about working closely with our customers to see what other solutions we can devise," said Caroline Becquart, MSC's senior vice president in charge of Asia and the 2M network with AP Moller-Maersk.

"Unfortunately, even when the canal reopens for the huge backlog of ships waiting at anchorage, this will lead to a surge in arrivals at certain ports and we may experience fresh congestion problems."

The Suez Canal crisis has hit the container market at a time when congestion issues were already pushing freight rates skyward, which has been a boon to liner operators' bottom lines amid supply chain challenges for their customers.

Becquart said Switzerland-based MSC expects the second quarter to have more disruption than the first three months of the year, and that it could be even more challenging than the height of congestion woes in 2020.

"Companies should expect the Suez blockage to lead to a constriction in shipping capacity and equipment, and, consequently, some deterioration in supply chain reliability issues over the coming months," she said.

10 ships redirected

MSC, the world's largest liner operator, said on Saturday that 10 vessels have been redirected in light of the Ever Given incident. The diversions included several vessels in its 2M services with Maersk.

For its part, Copenhagen-based Maersk told its customers that 14 vessels on its services were redirected, including ships operated by partners, and that number is expected to rise.

Even when the canal reopens, for the huge backlog of ships waiting at anchorage this will lead to a surge in arrivals at certain ports.

Caroline Becquart

"For every day the canal remains blocked, the ripple effects on global capacity and equipment continues to increase," the company said.

"The impact will continue well beyond the physical removal of the vessel and we are working hard to manage the impact as much as possible — both operationally and commercially."

The company said its estimated times of arrival are in jeopardy as salvage efforts continue, but it could not specify how long shippers will face delays.

"We have already started to proactively manage our capacity and will not be accepting cargo where we cannot ensure space," Maersk said.

"Throughout this process, we aim to give as much clarity and notice as possible. We are all in this situation together and everyone needs to collaborate towards mitigating the situation, for instance working to return equipment faster."

Rabie said on Saturday that some 300 ships are now waiting at either end of the canal, according to several press accounts.

Sand and ballast removed

The BBC reported that as of Friday night, some 20,000 tonnes of sand have been dredged from around the Evergreen Marine-chartered Ever Given, and some 9,000 tonnes of ballast water had been removed from the ship.

But strong tides and winds have hampered the refloating, which is being aided by Boskalis subsidiary SMIT Salvage.

Some 14 tugs were deployed to assist the attempt at high tide, and more are expected on Sunday.

Boskalis chief executive Peter Berdowski said it hoped to free the containership from its grounded position within days, The Guardian reported.

Meanwhile, Rabie told reporters that weather conditions may not be the main reason for the grounding — as Evergreen and owner Shoei Kisen have indicated.

"There may have been technical or human errors," the official said in a BBC report. "All of these factors will become apparent in the investigation."