The lasting effects of the Ever Given getting stuck

The vessel was finally re-floated and dislodged on Monday 29th March; however, the lasting effects of the Ever Given getting stuck are sure to continue for several months. Delays experienced by over 350 vessels, the rerouting of equipment, and the rush for vessel bunkering (re-fuelling) around Africa will continue to disrupt supply chains globally for some time.

With both the initial and subsequent lockdowns for the coronavirus still impacting world trade, the compound effect of the Ever Given could not have come at a worse time. It has come as a relief to many, though, that the vessel was able to be dislodged and did not require emptying as initially feared.

The lasting physical effects of the Ever Given getting stuck

The congestion at the Suez Canal will now move to other locations. Vessels that were due to arrive in ports around Europe will now be arriving together, causing further delays as vessels are forced to wait off-shore.

Some vessels will now omit ports to catch up on schedule*, resulting in cargo being discharged in the next port and additional backlog in feeder transport to move the goods to the correct port of arrival.

*Many vessels operate on a looped schedule and will be planned into ports months ahead.

Vessels carrying livestock or other perishables may need to change their schedule to visit a closer port immediately or risk starvation/spoilage. In the event that perishables need to discharge, they may need to be sold locally to recover some monies before spoilage, which will affect the local markets. As well as the immediate demand for resources on a local port, this will compound vessel delays when it does continue on its schedule.

To add to the need for more resources at local ports, several are awaiting the return of dredgers, excavators and tugboats that were dispatched to dislodge the Ever Given. When these vessels return to their ports, they may need crew changes, maintenance or other husbandry services before returning to operations.

As a contingency (for if the Ever Given remained stuck and required emptying), many vessels were diverted around the west coast of Africa. This will add to the transit times and costs, compounded by the sudden competition for vessel bunkering (re-fuelling) stops on route giving a seller’s market. This affects the vessels scheduled for this route, as well as the diverted vessels.

The lasting monetary effects of the Ever Given getting stuck

Liability and insurance claims for delayed goods and spoilage will take months, if not years, to process. Shoe Kisen, the owner of the Ever Given, declared general average on Thursday 1st April. General average is where the ship’s owner and the customers share the responsibility for costs in the event of a casualty to the vessel.

These costs will be calculated against the value of a consignment and held in lien against the cargo before being released to the consignee at destination. This means that there could be delays in obtaining cargo whilst the lien amounts are confirmed, as well as further delays as importers claim against insurance* or source funds from their own cashflow for release.

*In the event that cargo is not insured, there is the chance that cargo may be abandoned at port by the buyer. In this case, the fees could be reverted back to the shipper depending on the terms of the Bill of Lading.

The lasting effects of the Ever Given getting stuck will likely include additional fees on already-inflated ocean freight rates, too, as shipping lines will look to recover losses. This remains to be seen, though, as the logistics world concentrates on the immediate fallout.

If you’re looking for advice or assistance from industry experts, get in touch with our friendly UKCS team who can give you more information. 

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