The container ship that blocked the Suez Canal earlier this year has departed Egypt’s Great Bitter Lake to fanfare and a signing ceremony for a compensation agreement between its owners and the Suez Canal Authority.
The 220,000-ton Ever Given was freed after three months at anchor, bound for an inspection in the northern city of Port Said and then to Rotterdam, where it will unload the 18,300 containers onboard long after they were due.
The hulking vessel sailed up the Suez Canal, past a lavish party of assembled diplomats and flag-waving canal authority officials in Ismailia, as smaller boats sprayed jets of water in celebration.
“I announce to the world that we have reached a deal,” declared the SCA head, Osama Rabie. He described the events of the Ever Given’s grounding and subsequent salvage operations, saying “we were facing a tough test with the world watching”.
The Ever Given’s owner, Shoei Kisen Kaisha, was keen to preserve the celebratory mood after weeks of negotiations. “Our company … will continue to be a regular and loyal customer of the Suez Canal,” said the company president, Yukito Higaki, addressing the ceremony via video.
“We recognise the tremendous importance of the goods carried by our vessels and we regret the impact that the voyage delay has had on those with cargo stuck onboard,” Shoei Kisen Kaisha said in a statement.
The Ever Given was officially detained by the Egyptian authorities in April amid a dispute over compensation between its owners and the SCA after it blocked the waterway in late March. The vessel was grounded on the canal banks for six days, causing a backlog of more than 400 ships at each end of the canal, costing billions in trade.
“We are very happy that the seafarers are finally resuming sailing,” said Abdulgani Y Serang, the head of the National Union of Seafarers of India, which represents the 26-person crew. Eight members of the original crew were repatriated and new seafarers flown in to replace them as the ship was detained long enough for six of their contracts to expire.
Serang said the captain and crew were excited to finally sail out of Egypt, after months in fear as they risked arrest while a legal battle swirled around the ship and her cargo. “They just want to get going and move on with their lives,” said Serang.
“The seafarers were under a lot of stress due to the incident and because of the world’s focus on it,” he said. “They were aware there was support for them, but the case went to court in Egypt, and with the stance from the Suez Canal Authority it definitely added to the pressure.”
The battle over what caused the grounding and the SCA’s large compensation demands resulted in negotiations previously described as “long and arduous” by the Ever Given’s insurers, the UK P&I Club, while a separate legal case continued in court in the nearby port city of Ismailia.
The SCA pointed to culpability by the ship’s captain, claiming he entered the canal during poor weather and high winds and lost the ability to steer after travelling at speed. Other parties involved dispute this, underlining the role of the SCA’s canal pilots who steer ships through the tight waterway as well as authorities allowing the Ever Given to enter the canal during a sandstorm.
The SCA originally demanded $916m (£650m) in compensation, including a “salvage bonus”, and $300m for “loss of reputation”, a claim the UK P&I Club called “extraordinarily large” and “largely unsupported”.
This week an Egyptian court lifted the ship’s detention order, allowing the Ever Given to sail again. The UK P&I Club said it had “focused on reaching a fair and amicable settlement with the SCA … After more than three months of negotiations we are pleased that an agreement was reached which has allowed the ship to leave the Suez canal.”
No party involved has disclosed details of the compensation agreement, other than the inclusion of a new tugboat for the SCA. The Wall Street Journal reported that the preliminary deal totalled $200m, while Egyptian media and others said the deal could be as much as $550m.
“The Suez crisis was one of a number of once-in-a-generation disruption events that we have faced in an extremely short time, preceded by the pandemic and Brexit,” said Alex Hersham, the CEO of the logistics company Zencargo, whose customers represent an undisclosed amount of cargo onboard the Ever Given. “These all add to the growing strain that global supply chains are under.”
The Suez canal is responsible for at least10% of world shipping traffic, and is a focal point of Egyptian nationalism, earning the country roughly $5bn a year in revenues. In May the Egyptian president, Abdel Fatah al-Sisi, urged canal authorities to expand the lower half of the canal within a year, after he demanded an $8.2bn project to widen an upper section of the waterway in 2014 also be completed within a year.
