Grounded bulker blocking Suez Canal successfully refloated

A Hong Kong-flagged bulker that grounded in the Suez Canal blocking the key waterway for several hours on Thursday morning has been successfully refloated.

Leth Agencies posted on Twitter that the bulk Xin Hai Tong 23 had grounded at the 159 km mark on the canal at 0400 hrs local time.

In a second tweet a few hours later the agency said that tugs from the Suez Canal Authority had been able to successfully refloat the vessel at 0740hrs.

It was reported that a convoy of four vessels was stuck behind the stricken bulker and an ordinary group was set to enter the canal at 0600 hrs. Leth Agencies said that following the refloating of the Xin Hai Tong 23 a northbound convoy was due to enter at 0930hrs.

The Xin Hai Tong 23 is a 2010-built, 56,708 dwt bulker and flagged with Hong Kong.

The vessel has grounded in a narrow section of the Suez Canal and MarineTraffic shows it stranded diagonally across the waterway in similar way to the containership Ever Given which closed the canal for six days when it grounded in March 2021.

The Ever Given grounding caused chaos to the global supply chain. However, the Xin Hai Tong 23 is a significantly smaller vessel than the 199,000 dwt mega-containership and far less complex to refloat.

 

Traffic in Suez Canal normalized

Shipping traffic in the Suez Canal was proceeding normally on Monday after tugs towed a cargo vessel that broke down during its passage through the waterway, the Suez Canal Authority said.

The breakdown caused only minor delays, with convoys of ships resuming regular transit by 09:00 GMT, shipping agent Leth said.

The MV Glory, which was sailing to China, suffered a technical fault when it was 38km into its passage southward through the canal, before being towed by four tugs to a repair area, the Suez Canal Authority (SCA) said in a statement.

The Suez Canal is one of the world's busiest waterways and the shortest shipping route between Europe and Asia.

In 2021, a huge container ship, the Ever Given was stuck in high winds across a southern section of the canal, blocking traffic for six days before it could be dislodged.

The MV Glory is a Marshall Islands-flagged bulk carrier, data from trackers VesselFinder and MarineTraffic showed.

It departed Ukraine's Chornomorsk port on December 25, 2022 bound for China with 65,970 metric tons of corn, according to the Istanbul-based Joint Coordination Centre (JCC) overseeing Ukraine grain exports.

The JCC, which includes representatives from the United Nations, Turkey, Ukraine and Russia, said the ship had been cleared to carry on its journey from Istanbul after an inspection on January 03, 2022.

 

Suez Canal Authority inks MoU with Maritime Anti-Corruption Network

According to Seartrade Maritime News, Suez Canal Authority (SCA) and the Maritime Anti-Corruption Network (MACN) have signed a Memorandum of Understanding to provide a framework for cooperation.

The Suez Canal is a blackspot for petty corruption involving vessels transiting the waterway and MACN has been building its engagement with SCA. The MoU aims to establish an official communication channel between the Authority and MACN.

Admiral Osama Rabie, Chairman of the Suez Canal Authority, stressed that the Authority spares no effort to work on the stability and sustainability of global supply chains to facilitate traffic in the Suez Canal amid a package of effective measures that guarantee transparency and impartiality, with the Authority’s readiness to provide all capabilities and overcome all obstacles to activate cooperation with all partners and organizations working in the field of maritime transport.

Cecilia Müller Torbrand, CEO of the Maritime Anti-Corruption Network, thanked the Chairman of the Suez Canal Authority Admiral Osama Rabie, and the Authority’s work team, stressing that the Suez Canal occupies a special place in the maritime community, highlighting the need for cooperation to promote effective and safe trade.

The memorandum was signed by the representative of the Suez Canal Authority, Engineer Gamal Abu Al-Khair, Director of the Transit Department.

The Suez Canal links east and west cutting out a lengthy transit via the Cape of Good Hope and over 22,030 ships transited through the canal during the fiscal year 2021-2022.

However, complaints over corruption by users of the waterway are longstanding. In MACN’s report on its first 10 years of reporting between 2011 and 2020 the Suez Canal topped global risk hotspots. A total of 1,795 incidents were reported in the canal during the 10-year period. Most of the incidents were petty corruption with 1,626 involving demands for cigarettes.

Suez Canal to hike transit tolls

Tolls for vessels using the Suez Canal are set to rise by 15% next year (2023) with the exception of dry cargo and cruise ships which will increase by 10%.

The transit toll increases from January 2023 were announced at the weekend by Adm. Ossama Rabiee, Chairman and Managing Director of the Suez Canal Authority (SCA).

According to the SCA the increases are based on a number of pillars, the most important of which is average freight rates for various times of vessels.

“In this regard, there were considerable and consecutive increases within the past period; especially in container ships' freight rates, compared to those recorded before the Covid-19 pandemic which will be reflected in the high operational profits that will be achieved by navigational lines throughout 2023 in light of the continued impact of the disturbances in global supply chains and the congestion in ports world-wide, as well as the fact that shipping lines have secured long-term shipping contracts at very high rates,” said Adm Rabiee.

The much-improved performance of the tanker market was also noted by the SCA with daily crude tanker charter rates up 88% compared to average rates in 2021, average daily rates for LNG carriers increasing by 11% compared to the previous year.

Tolls for all vessel types including tankers and container ships will increase by 15%. The only exceptions are dry bulk ships, where charter rates are currently extremely low and cruise ships, a sector still recovering from an almost total shutdown during the pandemic.

It comes at a time when ship operators already face rising fuel costs. However, the increased savings made on higher fuel costs by using the shorter route through the Suez Canal was used in part to justify the toll increases.

The Suez Canal offers a significantly shorter route between Asia and Europe with the alternative involving sailing round the Cape of Good Hope.

When the Suez Canal was blocked by the grounded containership Ever Given in March 2021 analysts Sea Intelligence estimated on the basis of vessels sailing at 17 knots transiting via the Cape of Good Hope would add seven days to a Singapore to Rotterdam voyage, 10 days to West Mediterranean, a little over two weeks to East Mediterranean and between 2.5 – 4.5 days to the US East Coast.

Adm Rabiee also noted that the increases are inevitable given current global inflation of over 8% and increasing operational and navigational costs for the Suez Canal.

“It was emphasized as well that the SCA adopts a number of mechanisms with the sole aim of having its pricing policies cope with the changes in the maritime transport market and to ensure that the Canal remains the most efficient and least costly route compared to alternative routes,” the Authority said.

These take the form of rebates of up to 75% for specific sectors of shipping for defined periods if market conditions result in the canal becoming less competitive.

 

Ever Given starts journey out of Suez Canal

According to BBC, the mega container ship that blocked the Suez Canal in March finally left the Suez Canal after Egypt signed a compensation deal with its owners and insurers. The Ever Given, around 09:30 GMT headed north towards the Mediterranean escorted by tugs. The ship has been impounded for three months near the canal city of Ismailia.

As it got under way, Egyptian TV showed footage of the captain and a crew member being presented with flowers and a plaque on board the ship.

The 193 kilometre long Suez Canal connects the Mediterranean Sea at the canal's northern end to the Red Sea in the south and provides the shortest sea link between Asia and Europe.

The vital waterway was blocked when the 400-meter long Ever Given became wedged across it after running aground amid high winds. Global trade was disrupted as hundreds of ships were stuck in the traffic jam.

The container ship was refloated following a six-day salvage operation that involved a flotilla of tug boats and dredging vessels. One person was killed during the operation.

Since then, the Suez Canal Authority (SCA) has been seeking compensation from the Ever Given's Japanese owner Shoei Kisen for the cost of the salvage operation, damage to the canal's banks and other losses.

The SCA initially asked for US$916 million compensation, including US$300 million for a salvage bonus and US$300 million for loss of reputation. But UK Club - which insured Shoei Kisen for third-party liabilities - rejected the claim, describing it as "extraordinarily large" and "largely unsupported".

The SCA later lowered its demand to US$550 million. The final settlement, which has not been revealed, was agreed a few days ago and signed on Wednesday to coincide with the ship's release.

SCA head Osama Rabie told a news conference that the authority would not change its rules about the passage of ships in bad weather. However, he said the grounding had accelerated plans for the canal's expansion.

The UK Club paid tribute to "the work and expertise of the SCA and others whose professionalism and dedication resulted in the ship being refloated".

"Over the last three months we, along with the ship's owners and other interests, have worked closely with the SCA's negotiations team to achieve today's results," a statement said.

Yukito Higaki of Imabari shipbuilding, of which Shoei Kisen is a subsidiary, said the company would continue to be "a regular and loyal customer" of the Suez Canal Authority.

The vessel, with an Indian crew, is still loaded with about 18,300 containers. It is due to undergo an inspection by divers at Port Said before sailing to Rotterdam and then to the UK port of Felixstowe where it will offload its containers, the Wall Street Journal reported.

Ever Given to leave Suez Canal on 7th July

A giant container ship that blocked Egypt’s Suez Canal for nearly a week in March this year will be released on 7^th July following an agreement between authorities and the vessel’s owners, said Suez Canal Authority (SCA) on Sunday.

A ceremony for the signing of the settlement ending the dispute over the 400-meter-long Ever Given will be held on Wednesday, and the ship will be allowed to depart.

Earlier, Stann of London, the attorneys for the ship’s owner and insurers, said that a formal solution had been agreed upon and that preparations for its departure were being made.

Neither the SCA nor the attorneys provided details of the settlement. But the agreement marks an end to a dispute that arose after the Ever Given was freed after getting stuck in the vital waterway in March. The incident roiled global shipping markets.

The SCA had initially sought over US$900 million in damages and compensation that included recovering expenses related to freeing the ship, lost revenue and other costs and claims. The figure was later lowered to US$550 million.

Japan’s Shoei Kisen Kaisha the owner, and the ship’s insurers initially offered US$150 million.

The SCA brought the matter to an Egyptian court, which ordered the seizure of the ship pending a resolution of the dispute. Authorities had said that they were eager to reach an out-of-court agreement and that the ship would be allowed to leave once such a deal was reached.

The ship is being held in the Great Bitter Lake -- about halfway along the canal.

Settlement reached over ship stuck in Suez Canal

Reportedly, the owner and insurers of the mega container ship that blocked the Suez Canal for six days in March 2021 and disrupted global shipping have reached a settlement with the Egyptian authorities.

The insurer's statement did not specify the amount, but said that once the settlement is formalized, the ship ‑ Ever Given ‑ after nearly three months of haggling, finger-pointing and court hearings - would finally complete its journey through the canal.

"Following extensive discussions with the Suez Canal Authority's negotiating committee over the past few weeks, an agreement in principle between the parties has been reached," said a statement from the insurer UK P & I Club. "Together with the owner and the ship's other insurers, we are now working with the SCA to finalize a signed settlement agreement as soon as possible."

Since the ship was freed in a huge salvage effort, about six days after running aground across the Suez, the canal authority had been locked in an often acrimonious stand-off with the ship's owner and operators over what the authority said it was owed for the incident.

The authority had sought up to US$ one billion in compensation, a figure that included the cost of tugboats, dredgers and crews hired to salvage the ship as well as the loss of revenue while the canal was blocked.

Under the standard terms that shipping companies are required to accept before traversing the Suez Canal, ships are liable for all costs or losses they cause in the canal.

Still, the authority never provided a detailed breakdown of how it had arrived at such a large amount.

The sum does not cover the disruption to worldwide shipping, including delayed cargo and costs to other shipping lines, which experts have said could ultimately soar into the hundreds of millions.

Physically, at least, the Ever Given was long ago declared fit to move on. But until compensation is paid, the ship and its crew will remain impounded in the Great Bitter Lake, a natural body of water that connects the section of the canal where the ship was stuck to the next segment, according to SCA Chairman, Osama Rabie.

An Egyptian court had ordered the ship held until the financial claims were settled, a move that drew protests from the Ever Given's Japanese owner, Shoei Kisen Kaisha.

For more than three months, they faced off in an Egyptian commercial court and in the local press.

The Egyptians insisted that the captain - who, under SCA rules, bore ultimate responsibility for commanding the ship despite the presence of Suez pilots who directed steering and speed - was to blame.

Whatever were the Ever Given's objections, the canal having a reputation for demanding large liability sums from ship-owners, enjoyed a strong hand in the negotiations.

The months of negotiations left the ship's crew of 25 Indian seafarers stuck in the middle, unable to leave the Ever Given until the bargaining ends, but for a few cases in which the Egyptian authorities granted crew members' requests to leave after their contracts ended or for family reasons.

Unending saga of ship that stuck in Suez Canal

Evergreen mega container ship that grounded in Suez Canal on 23^rd March 2021, despite being afloat after six days and resumption of traffic, has not been allowed to move out of Suez Canal. While there is talk about the claim filed by Suez Canal Authority (SCA), no one seems bothered about fate of the cargo loaded at the ship.

Lately, an Egyptian court has rejected an appeal by the owner of the mega container ship that has been impounded by SCA for blocking the channel for nearly a week in March 2021.

The SCA said the vessel would not be allowed to leave the country until a compensation amount is settled on with the vessel’s Japanese owner, Shoei Kisen Kaisha.

A court in Ismailia had ordered the seizure of the vessel. The Ever Given’s owner filed an appeal on April 22 in hopes of overturning the decision.

The SCA has demanded US$916 million in compensation that covers salvage operation, costs of stalled canal traffic and lost transit fees for the week the Ever Given blocked the canal.

Negotiations between the SCA and the ship owner were still ongoing to settle the compensation claim. Shoei Kisen said it has notified a number of the owners of the approximately 18,000 containers on the ship to assume part of the damages demand.

The Ever Given was on its way to the Dutch port of Rotterdam and on 23rd March 2021 it slammed into the bank of a single-lane stretch of the canal about 6 kilometers north of the southern entrance, near the city of Suez.

A massive salvage ended the crisis after six days, allowing hundreds of waiting ships to pass through the Canal.

The blockage of the canal forced some ships to take the long alternate route around the Cape of Good Hope at Africa’s southern tip, requiring additional fuel and other costs. Hundreds of other ships waited in place for the blockage to end.

In a statement, Osama Rabie, the SCA chairman, expressed hopes that a solution acceptable to all parties will be found.

“The Authority is dealing with all the specific requirements of the negotiation with complete flexibility, in full respect for international norms in these sorts of situations,” Rabie said.

Rabie denied claims that the ship’s crew had been arrested, and said that the authority has no objection to crew members leaving or being replaced, provided that a sufficient number of sailors needed to secure the ship is present. He said that the ship’s captain needs to be present as the guardian of the vessel and its cargo.

The ship’s protection and indemnity insurer, UK Club, and its technical manager, Bernhard Schulte Shipmanagement (BSM), have said they were disappointed that the ship was being held.

UK Club has filed an appeal in an Egyptian court against its detention, citing a lack of supporting evidence for the SCA’s claim.

 Suez Canal chiefs on Tuesday implemented an Egyptian court order to seize the giant cargo ship that blocked the waterway for almost a week in March.

 “On April 12, a carefully considered and generous offer was made to the SCA to settle their claim. We are disappointed by the SCA’s subsequent decision to arrest the vessel today.”

Reinsurers are set to foot most of the bill for the grounding of the ship that halted traffic in the Suez Canal, industry sources said, with payouts expected to run into hundreds of millions of dollars.

Analysts at DBRS Morningstar said that total insured losses “will remain manageable given the relatively short period of time that the canal was blocked.”

Lloyd’s of London last week said the incident would likely result in a “large loss” for the commercial insurance and reinsurance market of at least US$100 million.

Ship stranded in Suez Canal re-floats

The stranded container ship blocking the Suez Canal for almost a week was re-floated on Monday and is currently being secured, Inchcape Shipping Services said, raising expectations the vital waterway will soon be reopened.

The ship was successfully re-floated at 4.30 am local time and was being secured at the moment, Inchcape, a global provider of marine services said on Twitter.

Ship-tracking service VesselFinder has changed the ship’s status to under way on its website.

The 400-metre (430-yard) long Ever Given was jammed diagonally across a southern section of the canal in high winds early on Tuesday, halting shipping traffic on the shortest shipping route between Europe and Asia.

At least 369 vessels were waiting to transit the canal, including dozens of container ships, bulk carriers, oil tankers and liquefied natural gas (LNG) or liquefied petroleum gas (LPG) vessels, SCA Chairman Osama Rabie told Egypt’s Extra News on Sunday.

Egypt’s Leth Agencies tweeted the ship had been partially refloated, pending official confirmation from the Suez Canal Authority.

The Suez Canal Authority had earlier said in a statement that tugging operations to free the ship had resumed. The Suez Canal salvage teams intensified excavation and dredging on Sunday and were hoping a high tide would help them dislodge it.

Suez Canal may remain closed for days and weeks

The Suez Canal Authority (SCA), which had allowed some vessels to enter the canal in the hope the blockage could be cleared, said it had temporarily suspended all traffic on Thursday.

“We can’t exclude it might take weeks, depending on the situation,” Peter Berdowski, CEO of Dutch company Boskalis which is trying to free the ship, told the Dutch television program “Nieuwsuur”.

A total of 156 large container ships, tankers carrying oil and gas, and bulk vessels hauling grain have backed up at either end of the canal, Egypt’s Leith Agencies said, creating one of the worst shipping jams seen for years.

“It is like an enormous beached whale. It’s an enormous weight on the sand. We might have to work with a combination of reducing the weight by removing containers, oil and water from the ship, tug boats and dredging of sand.”

Shipping experts say that if the blockage is not cleared in the coming days, some shipping may re-route around Africa, which would add roughly a week to the journey.

“Every port in Western Europe is going to feel this,” Leon Willems, a spokesman for Rotterdam Port, Europe’s largest, said. “We hope for both companies and consumers that it will be resolved soon. When these ships do arrive in Europe, there will inevitably be longer waiting times.”

Consultancy Wood Mackenzie said the biggest impact was on container shipping, but there were also a total of 16 laden crude and product oil tankers due to sail through the canal and now delayed.

The tankers were carrying 870,000 tons of crude and 670,000 tons of clean oil products such as gasoline, naphtha and diesel, it said.

According to oil analytics firm Vortexa, Russia and Saudi Arabia are the top two exporters of oil through the canal, while India and China are the main importers.

Joanna Konings, senior economist, International Trade Analysis at Dutch bank ING, said the impact on the world economy would be limited if it did not drag on since the container shipping industry was used to days of delays.

But Germany’s BDI industry association was concerned. Deputy Managing Director Holger Loesch said earlier delays were already impacting production, with industries depending on raw materials or construction supply deliveries particularly affected.

About 16% of Germany’s chemicals imports arrive by ship via the Suez Canal and the chief economist for the association of German chemicals and pharmaceuticals producers VCI, Henrik Meincke, said they would be affected with every day of blockage.

Bernhard Schulte Ship Management (BSM), the technical manager of Ever Given, said dredgers were working to clear sand and mud from around the blocked vessel while tugboats in conjunction with Ever Given’s winches work to shift it.

Japanese ship owner Shoei Kisen apologized for the incident and said work on freeing the ship, which was heading to Europe from China, “has been extremely difficult” and it was not clear when the vessel would float again.

The owner and insurers face claims totaling millions of dollars even if the ship is refloated quickly, industry sources said on Wednesday. Shoei Kisen said the hull insurer of the group is MS&AD Insurance Group while the liability insurer is UK P&I Club.