It may take four days for traffic to return to normal, Suez Canal Authority Chairman Osama Rabie said at a Monday evening press conference. Earlier, a canal authority official said a week was more likely.
Those assessments may be optimistic, according to Arthur Richier, an analyst at energy-intelligence firm Vortexa. Freight rates for the affected shipping routes are already rising due to the lower availability of tankers as some stay stuck and some take the longer route around the southern tip of Africa. Traveling via that route can add two weeks onto a vessel’s journey between Asia and Europe.
“It’s going to take them five or six days to clear up all the backlog of traffic,” Rustin Edwards, the head of fuel-oil procurement at shipping firm Euronav NV, said on a conference call on Tuesday. “You’re going to start seeing congestion at delivery ports when the ships that diverted and the ships that went through start arriving at the same destinations. It’s going to cause a bit of a headache for a lot of container companies for the next couple of weeks.”
The blockage will reduce global reinsurers’ earnings, which have already been hit by the pandemic, winter storms in the U.S. and flooding in Australia, according to Fitch Ratings. Prices for marine reinsurance will rise further as a consequence, it said. Fitch estimates losses may amount to hundreds of millions of euros.
In a potential merry-go-round of legal action, owners of the goods on board the Ever Given and other ships could seek compensation for delays from their insurers. Those insurers for the cargo can in turn file claims against Ever Given’s owners, who will then look to their insurers for protection.
Evergreen says Japan’s Shoei Kisen Kaisha Ltd.—the ship’s owner—is responsible for any losses. Shoei Kisen has taken some responsibility but says charterers need to deal with the cargo owners.
Evergreen’s legal adviser is Ince Gordon Dadds LLP, according to people familiar with the matter, who asked not to be identified because they aren’t authorized to speak to the media. London-based Ince Gordon Dadds and Evergreen declined to comment.
An official at Shoei Kisen said the company hasn’t received any compensation claim yet. The firm is still examining what it is responsible for. The ship’s hull is insured through three Japanese companies.
Responsibility for the giant ship’s grounding will be determined after an investigation, the Canal Authority’s Rabie said. He added that the canal authority isn’t at fault and that the ship’s captain—not the pilot—was responsible for the vessel.
—With assistance from Kyunghee Park, Salma El Wardany, Mirette Magdy, Tsuyoshi Inajima, Sharon Cho, Alex Longley, Benjamin Robertson, Krystal Chia, Serene Cheong, Julian Lee and Jack Wittels.
This article was provided by Bloomberg News.