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Multi billion-dollar Suez jam cleared

(ATF) The multi billion-dollar stockpile of cargo on ships backed up by the Suez blockage last week has been cleared.

Egypt’s Suez Canal Authority said Saturday that the jam of 225 ships caused when giant container vessel Ever Given became stuck in the channel had passed through.

Traffic on the canal, a conduit for about 12% of world trade, had begun moving again on Monday evening after the 200,000-tonne, 400-metre mega-ship was refloated with the help of international salvage experts.

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“All the ships waiting in the waterway since the grounding of the… Ever Given have completed passage,” SCA chief Osama Rabie said in a statement by the canal authority.

Rabie has acknowledged that the blockage, which began when the ship veered off course in a sandstorm, left Egypt’s international shipping and wider reputation on the line.

Egyptian authorities have presented the freeing of the mega-ship as a vindication of the country’s engineering and salvage capabilities. 

“Ninety-nine percent” of personnel who worked to refloat the giant vessel were Egyptian, according to Rabie. 

Unloaded and examined

The Ever Given was freed using dredgers and other craft. It became wedged across the channel after being blown off course, according to reports. The ship is being unloaded and examined south of the canal in Great Bitter Lake. 

Experts said similar events were likely to happen again

“The average size of most vessels has increased exponentially over the last 15 years. The ability to salvage these bigger ships has not,” Peter Townsend, a marine insurance industry veteran, told Al Jazeera. “The issue is getting containers off essentially a 20-storey high building at sea.”

Egyptian President Abdel Fattah al-Sisi has pledged investment to ensure no repeat of the episode, and the SCA has called for new tugboats and dredgers are needed.

Sisi visited the canal last week. 

“We have to give a strong message to the world that the Suez Canal . can transport world trade at this rate or more,” he said, according to Al Jazeera.

Economically vital

Maritime data company Lloyd’s List said the blockage had held up an estimated $9.6 billion worth of cargo each day between Asia and Europe.

The canal is economically vital to Egypt, which lost between $12 and $15 million in revenue for each day the waterway was closed, according to the canal authority.

Nearly 19,000 ships navigated the canal in 2020, working out an average of just over 50 per day, it says.

But the president and port authority have ruled out any further widening of the southern stretch of the canal where the boat became diagonally stuck.

Sisi oversaw an expansion of a northern section, which included widening an existing stretch and introducing a 35 kilometre parallel waterway, to much fanfare in 2014-15.

But that was achieved at a cost of over $8 billion, without significantly increasing revenues from the canal. 

The Suez Canal earned Egypt just over $5.7 billion in 2019/20, little changed from the year before, and similar to the $5.3 billion in revenues earned back in 2014. 

“Economically… (further expansion) would not be useful,” Sisi declared this week. 

The costly blockage is likely to result in litigation, according to analysts, with the ship’s Japanese owners, Taiwanese operators and Egypt itself all under the microscope. 

  • Reporting by AFP

Mark McCord

Mark McCord is a financial journalist with more than three decades experience writing and editing at global news wires including Bloomberg and AFP, as well as daily newspapers in Hong Kong, Sydney and Melbourne. He has covered some of the biggest breaking news events in recent years including the Enron scandal, the New York terrorist attacks and the Iraq War. He is based in the UK. You can tweet to Mark at @MarkMcC64371550.

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