Suez Canal diverts ships to old channel after giant container ship runs aground

Cairo

SHIPS in the Suez Canal were being diverted to an older channel on Wednesday after a large container ship ran aground, blocking vessels passing through one of the world's most important waterways, said maritime sources and companies involved.

About 12 per cent of world trade (by volume) passes through the canal connecting Europe and Asia. The Suez Canal Authority (SCA) remains a major source of hard currency for Egypt.

At around 5.40am GMT on Tuesday, one of the largest container ships in the world - the 200,000-ton Ever Given - ran aground in the canal, said Bernhard Schulte Shipmanagement (BSM), the ship's technical manager, as investigation was under way.

Sources said the mishap occurred because of bad weather. Operations to float and free the vessel began on Wednesday morning, they said, adding that some delays to shipping were expected.

Ship-tracking data on Refinitiv Eikon showed seven tug-boats coming to the aid of the Rotterdam-bound vessel, which appeared in tracking maps to still be grounded. It was unclear how soon the vessel would be free.

The ship is 400 metres long and 59 metres wide, and can carry up to 20,000 20-foot equivalent unit (TEU) shipping containers.

Taiwan's Evergreen Marine Corp, which is leasing the vessel under a time charter, said the shipowner had informed the company that the ship "was suspected of being hit by a sudden strong wind, causing the hull to deviate from the waterway and accidentally hit the bottom and run aground".

BSM, which handles the ship's crew and technical issues, said all the crew are safe and accounted for, and that there have been no reports of injuries or pollution. It has notified the authorities and "interested parties", but said it could not confirm who is the owner of the ship.

Port agent GAC said on Wednesday on its website that 15 other ships in the northbound convoy behind the Ever Given were detained at anchorages waiting for the canal to be cleared. A southbound convoy was also blocked.

A growing number of tankers have gathered near the entrance to the canal, waiting to pass through.

Asia-Europe container trade flows are picking up again after the Chinese New Year, so an extended blockage would have severe consequences as the alternative route via the Cape route will be a week slower, said Tan Hua Joo, a consultant with Liner Research.

Any delays will exacerbate the shortage of container ships and boxes, as 30 per cent of global container ship capacity passes through the Suez, showed data from Liner Research Services.

During 2020, nearly 19,000 ships, or an average of 51.5 ships per day, with a net tonnage of 1.17 billion tonnes passed through the canal, said the SCA.

The impact on oil and gas flows will depend on how long it takes to clear the container ship, the sources said. As of Wednesday, five laden liquefied natural gas (LNG) tankers were unable to pass through the canal due to the grounded container ship, said data intelligence firm Kpler. Of the five, three were bound for Asia and two for Europe, said Kpler analyst Rebecca Chia. She said that if the congestion persists until the end of this week, it would affect the transit of 15 LNG tankers. REUTERS