Piracy fears mount as ships take long way around Africa to avoid blocked Suez Canal
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Sudarsan Raghavan and Antonia Noori Farzan
Cairo - Brand-new Kia automobiles, cases of Heineken beer, live animals and billions of dollars of crude oil and other commodities remained stranded Friday in the Suez Canal as tugboats and dredgers tried to free a grounded container ship that has come to symbolize the perils of a global economy that relies on being able to send goods 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 that connects Asia to Europe. Some tankers have already opted to change course and travel around the southern tip of Africa instead, adding weeks to their journeys and raising fears that the valuable cargo could be an appealing target in 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," adding that "we want to work hard and get the situation back to normal," 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 to the Ever Given. Other methods of removing the sand will be deployed, the authority said, without specifying what that might entail.
With some experts predicting that freeing the ship could take weeks, some global shipping companies on Friday began seeking alternative routes for their cargo.
"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. "That's an indication that they don't believe this is going to be solved in the short term."
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."
According to the ship-tracking service Marine Traffic, at least three container ships have changed their routes in the past hours, including a ship traveling from Malaysia to Europe and another one heading from Great Britain to Thailand, "adding a further 25 days" to their arrival time.
A third container ship was about to pass the Strait of Gibraltar "before turning around to travel around Africa on its journey towards Singapore."
Detouring around Africa is likely to add a week or two to most ships' journeys, depending on where they were when they changed course.
It will also mean hundreds of thousands of dollars in additional fuel costs, putting ship operators in a difficult place where they're forced to guess if the extra time and expenditure will pay off.
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 nations 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.
The Ever Given, which is operated by Taiwan-based Evergreen Marine Corp., was headed to 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 occured 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 to widen the canal in 2015, but only in selected areas, and not in the section where the Ever Given ran aground.
With more than 150 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 and unload their cargo.
"Once you open the canal, it's like ketchup out of a ketchup bottle," Jensen said.
The unprecedented pile-up "would be an annoyance but manageable" under normal circumstances, he added. But the global supply chain was already severely stressed by the coronavirus pandemic, leaving little room for error. Consumers shouldn't expect to see empty store shelves, but extended delays could mean the specific item they're looking for isn't in stock.
And while most consumer goods passing through the Suez Canal are headed from China to Europe, the cascading chain of dominos will eventually reach America too. "We're all connected globally," Platten said. "A delay in one area will lead to another delay."