Two years after Ever Given incident, global shipping body renews Suez Canal cooperation deal

IN THE early 1970s, I sailed on cargo ships to East Africa and the Indian sub-continent. Of course, global shipping has changed in many ways over the past 50 years.

But one difference between then and now is easy to forget. The Suez Canal was closed at the beginning of the Six-Day War, on 5 Jun 1967, and reopened on 5 Jun 1975. 

So for eight years, world trade continued without being able to use this crucial waterway, something that is almost unimaginable now. For a while, sailing around Africa to get to the East became the norm.

Two years ago on 23 Mar 2021, we had a demonstration of just how dependent the global logistics chain is on this link between the Mediterranean Sea and the Indian Ocean. The very large container ship Ever Given got stuck in the canal, and it took six days for it to be freed. The dislocation to trade was immense and the knock-on effects lasted for months.

Of course, world trade would in time adjust to another lengthy closure but those adjustments would be disruptive and expensive. To take a topical example, a bulk carrier laden with grain from Odessa to Mogadishu would have sailed right across the Mediterranean (passing the northern entrance to the Suez Canal), turn left and head south to the Cape of Good Hope and then effectively head back, sail north to the Somali port, which is only a couple of days steaming from the canal’s southern end.

As canal closures are extreme events, it is important to keep day-to-day canal operations running as smoothly as possible.

In this regard, the International Chamber of Shipping (ICS) and the Suez Canal Authority (SCA) have extended what ICS describes as a “landmark agreement”.

The global shipping body says the extension of the agreement, initially signed in May 2022 ahead of the COP27 meeting and intended to be a year-long commitment, signifies an ongoing pledge to open communication between the ICS and the SCA.

ICS says the agreement covers “key issues impacting international shipowners and operations of the Suez Canal”. It adds that it “signifies an ongoing commitment to collaborating on matters that impact all stakeholders in the shipping industry, including long-term strategies for toll pricing, environmental protection, and decarbonisation”.

SEE ALSO

A step towards saving the oceans

As ICS explains, the canal itself is only one aspect of Egypt’s ambitious and comprehensive maritime ambitions. It notes: “Egypt is increasingly positioning itself as a key figure in the shipping sector’s decarbonisation, with plans to create zero emission fuels for export and use domestically.” Egypt also hosted COP27 which was significant for ICS too, serving as the platform for the launch of the Tyndall Centre report Shipping’s role in the global energy transition and more governments coming on board with the Clean Energy Marine Hubs initiative.

ICS Secretary General Guy Platten says: “This extension of the agreement between ICS and SCA shows the strength of collaboration between our organisations. The shipping industry as a whole increasingly recognises the importance of working together to tackle collective challenges and achieve mutual goals.”

He adds: “The Suez Canal is a vitally important trade route for the shipping industry, so it is a real positive development that we have a long-term commitment to working together to maintain open dialogue on matters impacting both shipowners and the authority.”

The Ever Given grounding highlighted areas where issues can arise. Some of them are politically sensitive as is obvious to anyone with even just basic knowledge of the history of the canal since the early 1950s.

It is therefore encouraging to note that ICS and SCA are developing a constructive working relationship.