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SATURDAY, December 10, 2022
Piracy fears mount as ships take long way around Africa to avoid blocked Suez Canal

Piracy fears mount as ships take long way around Africa to avoid blocked Suez Canal

SATURDAY, March 27, 2021

CAIRO - Brand-new Kia automobiles, cases of Heineken beer, live animals and billions of dollars of crude oil and other commodities remained stranded in the Suez Canal throughout the day on Friday. Meanwhile, tugboats and dredgers tried to free a grounded container ship that has come to symbolize the perils of a global economy that relies on goods traveling around the world in larger and larger vessels.

The Ever Given, one of the largest container ships ever built, has been stuck in the canal since Tuesday, creating an increasingly expensive traffic jam on both sides of the waterway. Some tankers have already opted to travel around the southern tip of Africa instead, adding weeks to their journeys, through a region known for piracy.

"It just shows you how vulnerable our supply-chain lines are," said Guy Platten, secretary general for the U.K.-based International Chamber of Shipping.

On Friday morning, the canal's service provider, Leth Agencies, said in a tweet that the Ever Given "remains grounded in the same position" with tugboats and dredgers working to dislodge the vessel, which is blocking the flow of an estimated $12 billion in goods.

Meanwhile, the Japanese owner of the ship expressed hope that it could be freed by Saturday night. Yukito Higaki, president of Shoei Kisen Kaisha, apologized Friday for the "great trouble and concern," according to the Japanese financial news website Nikkei Asia.

Egypt's Suez Canal Authority said Friday afternoon that its dredging operations were roughly 87% complete, but navigational safety regulations prevented the dredging ship from moving too close.

The U.S. Navy plans to send a team of dredging experts to the canal to assess the problem, CNN reported.

With some experts predicting that freeing the ship could take weeks, a number of global shipping companies on Friday began seeking alternative routes.

"We're now beginning to see even vessels that had entered the Mediterranean hang a U-turn," Lars Jensen, the CEO of Denmark-based SeaIntelligence Consulting, told The Washington Post.

At least seven tankers carrying liquefied natural gas were diverted, including three steered toward the longer route to Europe via the Cape of Good Hope in southern Africa. Another nine tankers were expected to be diverted if the blockage continues into the weekend, an analyst for data intelligence firm Kpler told the Guardian newspaper.

At least four long-range oil tankers with the capacity to haul 75,000 tons of oil were also possibly headed around the Cape of Good Hope, London-based ship brokering firm Braemar ACM told Reuters, adding that shipping rates have nearly doubled this week "as the market starts to price in fewer vessels being available in the region."

On the ship-tracking service Marine Traffic, several ships could be observed changing course Friday.

Detouring around Africa is likely to add a week or two to most itineraries and hundreds of thousands of dollars in additional fuel costs.

With more ships potentially being diverted to the Cape of Good Hope, piracy could increase. Pirates have long preyed on ships moving in the waters off the Horn of Africa, and the seas off oil-rich West Africa are now considered among the world's most dangerous for shipping.

Over the past two days, the U.S. Navy said it has been contacted by shipping firms from multiple countries concerned about the heightened risks of piracy to ships being rerouted, a spokesperson for the U.S. Navy's Fifth Fleet, based in Bahrain, told the Financial Times.

"There is a risk there, and it's probably another reason why the ocean carriers will think twice before they actually go around the Horn," said Genevieve Giuliano, a professor at the University of Southern California's Sol Price School of Public Policy.

The Ever Given, operated by Taiwan-based Evergreen Marine Corp., was headed to the Netherlands on Tuesday when it ran aground in the 120-mile-long passage from the Red Sea to the Mediterranean during a dust storm. Exactly how the stranding occurred remains unclear, but experts have speculated that the containers stacked atop the ship could have acted like a massive sail propelling the boat forward in high winds.

Bernhard Schulte Shipmanagement, which is responsible for managing the ship's crew and maintenance, has said that an investigation into the incident is underway. But officials have yet to release any details, including who has been questioned. Typically, Suez-based pilots guide the ship through the narrow passage, and the management company has said that two pilots were on board when the boat ran aground.

Continued failure to dislodge the ship could become a source of embarrassment for Egypt, where the canal and its pivotal role in global trade is a source of national pride. The country spent $8 billion in 2015 to widen parts of the canal, but not the section in question.

With more than 200 other ships stuck in the bottleneck, moving the Ever Given will only create a new set of headaches. Many of those vessels will arrive in European ports at the same time, and find they have nowhere to dock.

The unprecedented pileup could strain global supply chains already stressed by the coronavirus pandemic.

On top of the need to shuttle raw materials to industrial manufacturers and pharmaceutical companies, shipping firms are grappling with extraordinary demand for consumer products, which has created a scarcity of empty containers.

"There is this boom we are seeing which has never happened before," said Nils Haupt, a spokesperson for Hapag-Lloyd, an international container shipping company.

Five of Hapag-Lloyd's vessels are stuck near the Suez, including the New York Express, which is locked in the Great Bitter Lake, and the Tsingtao Express, one of many ships waiting in outer anchorage in Port Said.

The containers aboard many of the ships, with goods mostly from China, are destined for consumers in the United States and northern Europe. Treadmills, desks, coffee machines and home improvement supplies are among the shipments as many continue to work and exercise at home, Haupt said.

Just a few days into the blockage, Haupt does not expect the delay to hurt many consumers yet. While more than 200 vessels are in the line to traverse the Suez eventually, several of Hapag-Lloyd's ships are among the many others that have already been rerouted.

While most consumer goods passing through the Suez Canal are headed from China to Europe, the cascading chain of dominoes will eventually reach America. "We're all connected globally," Platten said.

The ongoing crisis highlights how much of the world economy relies on seafarers, some of whom have gone a full year without taking a break or seeing their families because of the pandemic, Platten said.