/Suez Canal Blockage Forces Operators to Reroute Ships

Suez Canal Blockage Forces Operators to Reroute Ships

SUEZ, Egypt—The operator of the ship blocking the Suez Canal said it would take at least two or three more days to dig out, while other ship operators began rerouting tankers and containers, sending some on two-week extended voyages around the southern tip of Africa.

Dredgers worked Friday to remove hundreds of thousands of cubic feet of sand around the bow of the 1,300-foot Ever Given, operated by Taiwan-based Evergreen Group. An attempt early Friday to refloat the vessel wasn’t successful, according to its ship management firm.

Evergreen said a salvage team was still clearing sand and mud around the ship’s bow to try to free the vessel during high tide, adding that it would take “at least two to three days to reach the required depth for the stranded ship to refloat.” A person familiar with the salvage operation said efforts to clear the canal are more likely to extend into the middle of next week.

Re-Route

Shipping companies with vessels idling in or near the Suez Canal are considering taking a detour around Africa. The Cape of Good Hope route is considerably longer and burns more fuel, making it less popular than the Suez Canal option.

Major world shipping routes

Example: Singapore-Rotterdam, Netherlands

Major world shipping routes

Example: Singapore-Rotterdam, Netherlands

Major world shipping routes

Example: Singapore-Rotterdam, Netherlands

Major world shipping routes

Example: Singapore-Rotterdam, Netherlands

Earlier in the day,

Yukito Higaki,

president of Imabari Shipbuilding Co.— whose group of companies includes the ship’s owner, Shoei Kisen Kaisha Co.—said at a news conference in Japan that workers hoped to dislodge the ship by Saturday. More diggers were being brought in and salvage teams planned to siphon out fuel and ballast water to lighten the ship, according to one person involved in the operation.

“It’s a difficult process. The ship’s bow is still wedged in the canal wall and there could be some structural damage,” this person said. “If you try to yank it out, things could get worse and fuel could spill out. It’s the worst place in the canal for such a big ship to be stuck.”

The U.S. said it had offered unspecified assistance to clear the waterway, which connects the Mediterranean and Red Seas and is a choke point for as much as 13% of global maritime trade and 10% of seaborne oil shipments. While most of the immediate impact of the shutdown will hit European and Asian companies that use the route, the closure threatens knock-on delays and costs to U.S. importers and exporters that are already struggling with port delays on the U.S. West Coast.

White House press secretary

Jen Psaki

said the Biden administration sees “some potential impacts on energy markets” due to the vessel blocking the Suez Canal. She said that the White House was in close consultation with Egyptian officials that and the U.S. had offered assistance. The channel is also strategic for Washington as U.S. and allied warships use it frequently to move between Europe, the Mideast and Asia.

Meanwhile, the logjam of vessels waiting at both ends of the Suez Canal grew to 237 on Friday, up from 156 the previous day, according to Leth Agencies, a shipping services provider. For days, as Egyptian authorities tried to clear the canal, shipowners and operators debated whether to reroute ships around the southern tip of Africa—potentially adding weeks and tens of thousands of dollars to the cost of voyages—or to wait for the canal to free up again.

Many shipowners have now decided to reroute. Early Friday, the Ever Greet—a sister ship to the Ever Given—was steered away from Suez toward Africa’s Cape of Good Hope, according to MarineTraffic, a shipping tracker. The vessel was sailing from Malaysia to Rotterdam in the Netherlands.

“It was supposed to go through Suez…It’s going [via] Cape Town now,” said a manager at the Ever Greet’s owner, Nissen Kaiun KK.

Salvage teams are planning to siphon out fuel and ballast water to lighten the stranded Ever Given, though the operation raised concerns about potential structural damage.



Photo:

handout/Reuters

Two other container vessels, one headed from Rotterdam and another from the U.K., abruptly changed course from their earlier planned tracks through the Mediterranean, according to MarineTraffic. With no end in sight to the blockage, “we will see increasingly more operators take similar steps,” said a spokeswoman for Greek shipper Capital Ship Management Corp., owner of the Hyundai Prestige, one of the diverted container ships. A crude tanker and several giant tankers carrying liquefied natural gas have all changed course and are now heading to the Cape of Good Hope, according to ship trackers.

Shipping giant

A.P. Moeller-Maersk A/S

said 22 of its ships have been affected by the blocked canal, including two that it has now rerouted to the Cape of Good Hope.

Most vessels that were already close to the canal are now crowding the waterway’s two entrances. So far, most of these ships are holding tight. Analysts said the longer sailings would further scramble the world’s carefully choreographed ballet of container-based shipping.

Beyond the effect on European and Asian businesses, U.S. importers could also feel an impact. Demand for containers and berthing space soared late last year and into this year, well before the Suez blockage.

Backups in container ports, especially along the U.S. West Coast, have grown during a normally slack period in shipping demand. That has tied up inventories for weeks in some cases, as ships wait to reach berths while unloaded containers sit for long periods at packed freight terminals.

The Suez blockage “will drastically reduce global container-shipping capacity and lead to further delays for American importers to get their orders delivered,” said

Lars Jensen,

chief executive of Copenhagen-based SeaIntelligence Consulting. “This couldn’t have come at a worse time because all ships available have already been deployed.”

Shipping companies have reported more than 300 idled vessels on either side of the crucial waterway, which links the Mediterranean Sea with the Red Sea.



Photo:

Mirette Magdy/Bloomberg News

While customers around the world can expect delays, European ports are also girding for congestions once rerouted ships eventually get into port. Gateways like Rotterdam and Antwerp, Belgium, could see waiting times lengthen significantly, analysts said.

“The longer it takes to refloat the vessel, the greater the risk that we’ll see serious bottlenecks in ports in Northern Europe, and the bigger the hurdle to clean up,” Maersk told its clients.

The canal closure has alarmed companies that don’t use the waterway. Russian steelmaker

PAO Severstal

gets the coal and iron ore it uses to make its metal from local sources, and the company doesn’t send its finished product through the canal.

“But obviously, freight costs went up everywhere, and we need to calculate how that will affect us,” said

Alexey Kulichenko,

the company’s chief financial officer.

More on the Canal and Global Supply Chains

Corrections & Amplifications
The president of Imabari Shipbuilding Co., whose group of companies includes the ship’s owner, Shoei Kisen Kaisha Co., spoke at a news conference in Imabari, Japan. An earlier version of this article incorrectly said the executive spoke in Tokyo. (Corrected on March 26)

Write to Rory Jones at rory.jones@wsj.com, Benoit Faucon at benoit.faucon@wsj.com and Costas Paris at costas.paris@wsj.com

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