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t has become the most famous ship of the modern era; the ship that launched a thousand memes. The Always givenAfter six days of anxiety, a 200,000-ton mega-ship has floated back in the Suez Canal, but in its wake is a giant flotilla filled with everything from cattle to oil to flat furniture and erotic toys.
The sequel has just begun. Shipping giant Maersk predicts that the impact of backlogging will take months to work through global supply chains.
Beyond that, a multi-million pound legal battle will soon begin. Experts say it could easily take five years to resolve.
All of which raises questions about how sustainable it is for world trade to rely so heavily on ships as the Empire State Building is driven through a narrow man-made trench hundreds of times a year.
Among some maritime analysts, the initial reaction to the news of the stranded ship was a concern tempered by optimism. Dredgers and salvage experts would quickly descend into the canal, re-float the vessel and be on their way in a day or two, according to the theory.
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But what was not fully taken into account in this was the additional problem posed by Ever Given’s sheer size.
To meet the growing global demand to buy more things at cheaper prices, shipping companies have embarked on a nautical “arms race” to build ever larger ships.
In the last 20 years, the industry has engaged in “a men’s game; a Tower of Babel-like quest for dominance of the ocean ”, as described by Charmaine Chua, assistant professor in the Department of Global Studies at the University of California.
The object of the game is to fit as many 20- or 40-foot containers as possible onto a floating platform.
It was Egypt’s closure of the Suez Canal during the Six Day War in 1967 that catalyzed the search for mega-ships. It was closed for eight years, forcing companies to take longer routes and ensure economies of scale with more volume.
In the time of Gamal Abdel Nasser, the largest container ship carried 736 containers, or twenty-foot equivalent units (TEU). In 2003, the container ship broke the 10,000 TEU barrier. Fifteen years later, the Always given set sail at twice that size.
If you were to load your cargo from one end to the other, it would stretch from the outskirts of London, through Kent and most of the way through the Channel Tunnel to Calais. Despite this size, the Ever Given is manned by just 25 people.
The Suez Canal has expanded over the years, but not to the same degree as the ships that use it.
(EPA)
The Always givenThe 20,000 TEUs were about to be unceremoniously lifted and dumped into the Egyptian sand before rescue teams made the vital advance Monday morning. Things could have been a lot worse.
“It has to be difficult to move such a large ship in such a restricted space,” says Jai Sharma of the law firm Clyde & Co. “People have been talking for a long time that there will be a major incident involving one of these ships. “
If cargo had to be unloaded where it ran aground, it would have been “very difficult” to find cranes with sufficient reach, Sharma says. If it has been badly damaged, only a few ports are large enough to provide shelter.
When a lone bulldozer was photographed trying to clean up the mess Tuesday, it became clear that contingency plans may not have kept up with the massive expansion of bulk shipping. Point out thousands of memes about tools that are woefully unsuitable for the job at hand.
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The excavator has provided much-needed light relief and luckily the response from the salvage crews moved quickly through the gears. A cavalry of tugs and dredgers arrived to suck up thousands of tons of sand and slowly drag Ever Given to safety.
The work of that team may have saved billions of pounds in costs for world trade, but it will leave a huge bill for the owners of the Always given and its cargo.
Rescuers generally work “without a cure, without a fee,” Sharma explains. There is a negotiation process to decide how much your efforts are worth.
The scale of the operation means rescuers are in line for a multi-million pound reward and the Suez Canal Authority is likely to charge an equally hefty fee for their services.
Insurers will pay much of the bill for cargo owners’ losses, then spend years in court and arbitration claiming all they can from shipowners and carriers.
For companies whose goods have been delayed on hundreds of ships queuing behind the Ever Given, it can be difficult to recoup money for losses, according to Sharma.
For those who took a 6,000 km detour around the Cape of Good Hope, the likelihood of recouping losses is more remote.
Sharma says: “From the perspective of English law, I don’t think Ever Given has a duty to take care of them. There will be massive but very scattered losses that are difficult to recoup for that reason. “
Delivery company ParcelHero estimates that e-commerce businesses globally will be hit by £ 4bn due to disruption of supply chains and rising shipping costs.
Will all these losses sound the mega ship’s death sentence? Probably not. The handful of companies that dominate global shipping can still borrow billions at extremely low interest rates to build more giants. But the economics of making ships much larger than the Ever Given seem dubious.
Larger container ships need to be 91% full to save money compared to smaller vessels. Insurers have been hesitant to provide coverage for mega-vessels, fearing large losses in the event of a serious incident.
Half a century after the closure of the Suez Canal that began the quest for ever-increasing size in global shipping, the fallout from last week’s closure may add to those concerns.
