The giant container ship that blocked the Suez Canal was partially floated again early Monday, days after the ship got stuck and stalled a major global trade route.
The Suez Canal Authority said the ship, known as Ever Given, “responded to the towing and towing maneuvers.” It added that the ship’s course has been corrected by 80% and further maneuvers will continue if the water level rises later in the day.
Brent crude oil futures fluctuated Monday before gaining 0.9% to $ 65.18 a barrel, while US crude rose 0.7% to $ 61.42 a barrel around noon.
It remains unclear what the condition of the stranded ship is and when the canal would be open to traffic. The canal authority announced that once the ship is fully floated and headed into the lake area – a wider section of the canal – for technical inspection, shipping will resume.
The statement followed an earlier tweet from maritime service company Inchcape that said the Ever Given has been floated and secured.
The Ever Given is one of the largest container ships in the world. It is a 220,000 ton mega-ship with a capacity of 20,000 containers that is nearly a quarter mile long. It got stuck diagonally on Tuesday after running aground while entering the Suez Canal from the Red Sea.
The ship completely blocked the canal, which is home to up to 12% of the world’s maritime trade, creating a traffic jam with hundreds of ships waiting to enter the Suez.
Maritime data showed that at least 10 tankers and container ships changed course to avoid the congestion on the canal. These include at least two US ships transporting natural gas for Cheniere and Shell / BG Group.
The crisis, now on the sixth day, has heightened concerns about the global supply chain, which has already been hit by the coronavirus pandemic. According to Lloyd’s List, each day the blockade disrupts more than $ 9 billion worth of goods, which is roughly $ 400 million an hour.
Problem not yet resolved
Maersk, the world’s largest container shipping company, issued a notice on Monday that the consequences of the blockade could be long-lasting.
“Even if the canal reopens, the impact on global capacity and equipment will be significant, and the blockage has already created a number of other disruptions and backlogs in global shipping that can take weeks, possibly months, to resolve.”
The Ever Given ship is not yet fully removed and “it is too early to say when the Suez Canal will be reopened,” added the shipping giant.
Fitch Ratings warned Monday that the blockage of the Suez Canal and the resulting disruption to global shipping is “likely to cause a major loss event for the reinsurance industry”.
“The ultimate losses will depend on how long it takes the salvage company to completely free the container ship and when normal shipping can resume. Fitch estimates, however, that the losses can easily amount to hundreds of millions of euros,” it said.
While the event will reduce global reinsurers’ earnings, it shouldn’t materially affect their credit profiles, Fitch said, though it added that shipping reinsurance prices will continue to rise as a result of the grounding.
Experts told CNBC that problems caused by the Suez Blockade will not immediately subside once the Ever Given is released.
A view shows the Ever Given container ship in the Suez Canal in this satellite image from Maxar Technologies captured on March 28, 2021.
Maxar Technologies | Reuters
Tim Huxley, director of Mandarin Shipping, said it will take “some time” for traffic to cross the narrow canal. And when these ships and tankers arrive at their destinations, the ports are likely to experience congestion that will also take some time to clear, he added.
It will take a while for the entire supply chain to return to normal, and this will affect manufacturers and retailers across the board.
Tim Huxley
Director, Mandarin Shipping
“Typically about 50 ships pass through the canal a day. Right now there are about 300 ships that are secured. This is a huge congestion that is at both ends of the canal,” he told CNBC. Street Signs Asia “on Monday.
“It will take a while for the entire supply chain to return to normal and this will affect manufacturers and retailers across the board,” said Huxley.
– CNBC’s Matt Clinch, Natasha Turak, Holly Ellyatt and Lori Ann LaRocco contributed to this report.
