News Apr 27

Suez Canal wrangle near deal as container spot rates soar

Giant container ship Ever Given still being detained by Egyptian waterway authority, five weeks after it wedged diagonally in high winds, blocking all traffic

Suez Canal wrangle near deal as container spot rates soar
Ever Given, one of the world's largest container ships, after it was partially refloated in the Suez Canal on March 29. Since it finally came unstuck, it has been held with its cargo in a lake separating two stretches of the canal. Photo: Reuters

(ATF) The Suez Canal Authority (SCA) wrangle with a Japanese shipowner over last month's blockage would soon yield a settlement, the waterway manager said on Monday, as container prices continued to rise despite the clearance.

The giant container ship Ever Given is still being detained by the Egyptian canal authority, five weeks after it wedged diagonally across the canal in high winds, blocking all traffic.

Since it finally came unstuck, it has been held with its cargo in a lake separating two stretches of the canal. The SCA has made a $916 million claim against its Japanese owner, Shoei Kisen.

Only two crew members have left the ship since it dropped anchor in the lake after being dislodged on March 29, while 23 merchant mariners, all Indian nationals, remain on board.

In a statement, SCA chairman Osama Rabie said the crew were not detained and were free to leave or be replaced, as long as the captain stays on board as the guardian of the vessel and its cargo.

INSURER DISAPPOINTED

The ship's protection and indemnity insurer UK Club and its technical manager Bernhard Schulte Ship-management (BSM) have said they are disappointed that the ship is being held.

UK Club has filed an appeal at an Egyptian court against its detention, citing a lack of supporting evidence for the SCA's claim.

Meanwhile, container spot rates increased another 5% to a new all-time high.

"Spot rates reached new historical highs after 5% increase last week and we expect this trend to continue as vessels only starting to arrive in European ports after the Suez Canal blockage," Andrew Lee, equity analyst at Jefferies, said on Monday.

PORT CONGESTION

Rates have soared 15% since April 2, four days after the Ever Given was removed from the Suez Canal on 29 March.

"We expect container spot rates to continue to rebound as the delayed vessels will lead to port congestion and reduce global effective supply due to longer journeys and turnaround times," Lee added.

Data released on Monday showed that world goods trade rose again in February for the ninth consecutive month.

"That marks the longest uninterrupted expansion in over 20 years," Simon MacAdam, senior global economist at Capital Economics, said in a report.

With reporting by Reuters

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