How a wind caused hundreds of ships and boats to stand still, causing tens of billions of dollars in damage to global trade?

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2021-03-28 21:09:47

According to weather forecasts on March 23, winds with a speed of more than 40km / h followed by sand were blown through the north of Egypt. This kind of weather is not uncommon at this time of year in the Sinai Desert.

In such weather conditions, the Suez Canal – one of the most important shipping routes in the world, is still operating. One of the largest container ships on the planet – the Ever Given, passed. And this decision to continue the move will affect global trade in just a few hours.

At 7:40 (local time), the super-heavy ship with a mass of containers carrying everything from frozen fish to furniture ran aground in the Suez Canal. This incident will not only show the complexity of navigating a ship the size of the Eiffel Tower, but also show the fragility of the supply chain, as well as the global economy.

  The Suez Canal Crisis: How did a wind freeze hundreds of boats, costing global trade tens of billions of dollars?  - Photo 2.

Based on tracking data and more than 10 interviews with people in the industry, it is known that the Ever Given train began to pass through the 300m wide canal while at least 1 other train decided to stop due to high winds. According to 2 sources close to Bloomberg, Ever Given does not use tugboats, while the two smaller container ships in front are in use.

After that, the unexpected happened very quickly. When it started moving towards the sand, the ship accelerated. The purpose may be to navigate itself, but the effort is too late. Ever Given’s stacked crates became a “sail” that drove the ship off course, moving deeper and deeper into the canal.

In addition, gusts of wind also make it difficult for captains to navigate their ships in one of the most difficult to pass waterways in the world. The Ever Given lost control and began to turn toward starboard while it was 8km from the canal entrance. The 200,000-ton ship then leaned toward the port side and then quickly passed by and stranded. The bow is often used to split the flow of water, but gets trapped in the sand.

  The Suez Canal Crisis: How did a wind freeze hundreds of boats, costing global trade tens of billions of dollars?  Photo 3.

The movement speed of the Ever Given is also a factor that causes the problem. The ship’s pre-stranded speed was 13.5 knots at 7:28, 12 minutes before stopping. Meanwhile, the speed limit of Ever Given when traveling through the Suez Canal is about 7.6 to 8.6 knots. Captains interviewed said they can be paid to speed up when there are strong winds, thereby navigating the boat more efficiently.

About 20 minutes after the incident, the first tugboat that accompanied the ships in front of Ever Given turned to push portside, attempting to turn the ship. After that, eight tugboats were mobilized again to push both sides of the ship, but to no avail. On the mainland, officials and investigators went to the canal shore to examine the situation. The excavators also attempted to dredge the bow of the sand, but failed.

In this situation, the weather conditions were not so extreme that all operations had to be stopped, even if nearby ports were allowed to close due to wind. Some other ships used tugboats or other supports, others were able to pass through without problems. Benhard Schulte Shipmanagement – the technical unit of the ship Ever Given, said the initial investigations showed that the incident happened due to the wind.

  The Suez Canal Crisis: How did a wind freeze hundreds of boats, costing global trade tens of billions of dollars?  - Photo 4.

Pictures of ships “lined up” waiting to pass through the Suez Canal.

However, at least 1 ship delayed its voyage through the Suez Canal. The day before Ever Given ran aground, the boat captain Rasheeda – moved from the southern end of the canal, concerned about the effects of an impending sandstorm and the ship was filled with liquefied natural gas. Therefore, he decided not to enter the channel after consulting with the ship’s manager, Royal Dutch Shell Plc.

Currently, the Suez Canal is still congested. According to many sources close to the rescue, the rescue of this super ship could last until at least next Wednesday.

  The Suez Canal Crisis: How did a wind freeze hundreds of boats, costing global trade tens of billions of dollars?  Photo 5.

The Suez Canal is the maritime route that sees 12% of global trade pass through. On average, every day there are 50 ships moving, starting early in the morning.

The captain of Ever Given had experience moving through the Suez Canal many times before, as well as the ability to navigate in high winds. The shipping companies said they ask the top captains for the routes through Suez. However, what happened then left 10 billion dollars worth of goods stuck, and more than 300 cargo ships from many industries were congested and unable to move.

Ian Ralby, CEO of consulting firm and IR Consilium law, said: “We have seen only one ship go astray and the entire maritime and global economy is affected. This ship transports the things that we need every day. This shows that the supply chain we rely on is tightly interconnected and that the rate of error allowed is very small.

Andrew Kinsey, a former captain who once piloted a 300m cargo ship through the Suez Canal and is now a marine risk advisor at Allianz Global Corporate & Specialty, said that every day when Ever Given lay still, it made the rescue difficult than. The reason is that the sediment entrained in the currents will cling around the ship.

This incident would be a missed opportunity, he added, if the shipping industry could not accommodate it. Kinsey said: “The larger ships will pass through Suez and the next incident will be even worse. “

  The Suez Canal Crisis: How did a wind freeze hundreds of boats, costing global trade tens of billions of dollars?  Photo 6.

Meanwhile, CNN stated, this incident happened at the time when the global supply chain was already experiencing major disruption due to the Covid-19 epidemic, which stunted sea trade. According to calculations by shipping data and information company Lloyd, the incident is causing the number of goods worth 400 million USD to be congested every hour. The freight volume west of the Suez Canal is estimated at $ 5.1 billion a day, and the cargo volume to the east is $ 4.5 billion a day.

Allianz said ships would incur additional long-term and expensive costs if the Suez Canal does not open soon. Redirecting the ship to Cape of Hope in southern Africa would take the move another two weeks and even risk pirates.

In addition, congestion in Suez has made the global oil market even more volatile, under recent pressure. Currently, the price of transporting 40 feet container from China to Europe has reached 8,000 USD / container, 4 times higher than the same period last year.

Experts said that due to being trapped at both ends, if pulled, the hull could break. So Egyptian officials and port authorities plan to unload the ship by helicopter to reduce the payload and wait for the tide to rise for the next 10 days to make the rescue easier.

Currently, the US and other countries have signaled a willingness to help Egypt in disarming the ship. US naval forces in the Middle East said it is ready to deploy forces to assist. A Dutch rescue team also confirmed that on March 28 there will be two more tugboats to Suez to assist in the rescue work. Turkish officials said they could also send a treatment ship to the canal to help Egypt.

However, the prolonged rescue process will cause the number of cargo ships trapped at both ends of the canal to skyrocket and communication activities will continue to be heavily affected.

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