MV Ever Given stranding blocks Suez Canal – legal issues for shipping and insurers await

It is not often that a stranded vessel will make the headlines of everyday news, however when an ultra large containership does so in one of the busiest and most vital shipping canals in the world and prevents ships from passing either side, it becomes newsworthy.

The MV Ever Given was transiting the Suez Canal, understood to be part of northbound convey. At approximately 07:40 (LT) on 23 March 2021 the vessel stranded, said to have been caused by high winds and a dust storm. She did so in such a way that the 15 other vessels behind her in the convey could not pass. The Ever Given, which was en route to Rotterdam from China, is over 400 metres long and over 20,000 TEU capacity. Widely reported pictures in the media illustrate the extent to which she has effectively blocked the canal.

At the time of writing there were numerous reports that the vessel had been partially refloated – however these appear to be inaccurate and the vessel continues to block the canal, which remains closed. This has already started a substantial backlog of traffic for vessels waiting to transit the canal, and whilst the authorities have re-opened part of the older canal, this will cause significant delay for many, which will continue after the vessel is refloated. To put the blockage in context, usually the canal sees approximately 47 vessels in each direction – according to Lloyd’s List intelligence tracking data, about 165 vessels are waiting on either side of the canal or cannot exit it.

There have been reports that a Lloyd’s Open Form has been signed and that the salvage contract is a joint one between Smit and Nippon Salvage Co., although that has not yet been confirmed. The vessel is fully laden but the option of removing containers to assist with refloating appears to come with many difficulties. Cargo interests may find themselves exposed to salvage and general average (if declared) charges.

As for vessels caught by the backlog, or those that were intending to sail through the Suez Canal, there will be a host of issues that they will need to consider in the coming days. The Suez Canal offers a quicker and, usually, cheaper (depending on the cost of bunkers) alternative to sailing via the Cape of Good Hope. Owners and charterers will need to consider between them what the best option will be for the continued performance of a voyage – but the usual discussion as to who should bear the inevitable additional costs may then follow. That will depend on the type of charter and the clauses contained in the charters. Cargo originally intended to transit the canal will probably suffer delays.