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Suez Canal Blocked for 6 days, March, 2021

"In a statement, Evergreen said that the SCA's demand is unjustified, noting an unusual request for $300 million for "loss of reputation" and another $300 million for a "salvage bonus." Independent observers suggest that the measurable damages to SCA in lost revenue and salvage costs are likely under $200 million.

Meanwhile, the vessel's crew are stranded on board, and they have reportedly been denied permission to disembark for a crew change or for shore leave. The owners of the Ever Given's 18,000 TEU worth of cargo will have to pay a general average bond to get their goods back, but those goods cannot be delivered until Ever Given is released - or another solution is found. An individual involved in the process told the Wall Street Journal that Evergreen is now looking at the "prospect of moving the containers to other ships and delivering them to the clients in Europe."





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"CAIRO – 18 April 2021: The Egyptian Suez Canal Authority (SCA) denied media reports claiming that the investigations of the grounding of the Panama-flagged ship “EVER GIVEN” showed a technical error and another human error from the captain.

Egyptian newspaper Al Watan reported on Saturday that the accident of EVER GIVEN ship in the Suez Canal was due to “a technical malfunction of the ship" beside a human error caused by the captain of the ship.

In a statement SCA Spokesperson George Safwat affirmed that the authority denies such media remarks, adding that the investigations are still ongoing, in parallel with the negotiations with the shipowner and the insurance company to reach an agreement on the amount of compensation that will be given to the authority for the moral and financial casualties of the accident."




How does the Ship insurance coverage coordinate with the cargo insurance?

What is the difference in insurance coverage, if the grounding of the Ever Given was caused by a mechanical problem, failure to get two tug boats for guidance, the shifting cargo load, Human Error, or purely by an act of nature?

Is there some advantage to letting the Suez Canal Authority hold the ship? Can the SCA detain the cargo?



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"The SCA has not provided a detailed justification for this extraordinarily large claim. … Owners have cooperated fully with the SCA throughout their investigation into the cause of the grounding, which we understand is now complete. When the grounding occurred, the vessel was fully operational with no defects in her machinery and/or equipment and she was fully manned by a competent and professional Master and crew. Navigation was being conducted under the supervision of two SCA pilots, in accordance with the Suez Canal Rules of Navigation. …"

Were the bow thrusters at full speed to Port before grounding? Was there a delay in starting the bow thrusters? Were the bow thrusters in local control, or under control of the bridge? Which crew members were in charge of the bow thrusters? Before grounding, when was the last previous time the bow thrusters were tested?


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Photo of the Ever Given crew:

"The ship was initially said to have got into difficulty after high winds and a sand storm hit but officials in Egypt said they had not yet ruled out human or mechanical error."





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"The usual transit speed for a ship in the canal and indeed any canal is about 8 knots. A combination of factors dictates this, predominantly the hydrodynamic effects of water displacement as the ship moves along the canal and the resulting huge pressure forces that are generated.

In simple terms, relatively slow speeds are required combined with maintaining a central track within the canal cross-section in order to minimise and maintain a balance of the hydrodynamic forces acting on the sides and bottom of the hull.

However, in addition there are the effects of wind and tidal currents to consider. The estimated lateral surface area of a loaded ULCC such as Ever Given is about 16,000 sqm. A 30-kt. wind such as that which has been reported at the time of the grounding if on the beam will generate a force on the ship side of about 300 mt. Additionally, there is the tidal current to consider. Although minimal compared to other parts of the world, there is nonetheless a tidal cycle and associated water flow. Even a low current of 0.5 knot will impart a force on a ULCC at a similar draft of 75mt."



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Wind:

"Meteorology of the event
The high winds and sand storm that contributed to the grounding incident were caused by a cold front trailing to the south of a low-pressure system centered near southern Turkey.

As the cold front swept eastwards across Egypt on March 23, powerful winds of 25-30 knots (29-35 mph) blew along the axis of the Red Sea from the south-southeast, into the southern end of the Suez Canal, as seen in the 6 UTC analysis from the GFS model (Figure 2). The Ever Given became stuck at 05:40 UTC that day. According to the GFS analysis, a sharp wind shift, with winds blowing out of the southwest to west, was present near the spot where the Ever Given blocked the canal, about five miles north of its connection with the Red Sea.

The New York Times reported that winds in excess of 70 mph blew in the region where the Ever Given became stuck; the owner of the ship, BSM, said that “initial investigations suggest the vessel grounded due to strong wind.” The strong winds were accompanied by large amounts of sand and dust, reducing visibility and making navigation more challenging.

Winds this strong are uncommon in the region, but strong winds have delayed shipping traffic or closed the Suez Canal on at least two occasions – December 11, 2010, and February 11, 2015."


 
AKE Report:

"No definitive determination has been made as to the cause of the grounding. While an investigation has been launched, Cairo and international shipping companies are likely to be on the same side in this case – attempting not to attribute the blockage to the vessel’s sheer size but on human error or a freak combination of unlikely causes."

"THE IMPACT The impact on global supply chains is expected to last for several months as capacity of the worldwide container ship fleet will not be able to help counter the worst effects of the Suez incident. Container traffic is expected to remain high in the short term. However, with consumption already volatile as many countries implement a third or fourth COVID-19 lockdown, uncertainty will remain high and protracted. While global business will seek a re-examination of global supply chains and investigation into the causes, Cairo will seek to blame the pilot, nature and/or mechanicals. The world’s largest shipping companies will back Cairo in their efforts to deflect blame from the sheer size of the ship being the main issue. It is in neither’s interests to prevent these massive vessels traversing the canal and therefore similar incidents will remain a possibility."









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Breaking News Thread:



The momentum of the Ever Given may have caused the stern of the ship to ground onto the West Bank of the canal, when the bow was stopped by running aground on the east Bank of the canal. The steering had been reported stuck, but that did not cause the accident, rather was a result of the bow colliding with the East Bank of the canal.


"Egypt will seek more than $1 billion in damages after a massive container ship had blocked the Suez Canal and disrupted global trade for nearly a week, the top canal official said.

He also warned the ship and its cargo will not be allowed leave Egypt if the issue of damages goes to court.

Lt. Gen. Ossama Rabei, head of the canal authority, said in a phone interview with a pro-government TV talk show on Wednesday that the amount takes into account the salvage operation, costs of stalled traffic, and lost transit fees for the week that the Ever Given had blocked the Suez Canal."




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what a rip
 
"Efforts by Evergreen, the operator of Ever Given, to have the vessel’s cargo separated from the ship in any legal action have failed.

The 20,000 teu Ever Given (IMO: 9811000) was arrested by Egyptian authorities, pending settlement of the Suez Canal Authority’s almost $1bn claim for compensation, after the grounding of the vessel shut down the key waterway for six days last month."



Whatever happened to determining the cause of the grounding? Unless there is some excuse, doesn't the fault lie with the captain of the
Ever Given? What does it matter who is at fault for the grounding?




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This article was written before the Egyptian court ruled that the cargo, and the Ever Given ship, are arrested. Has general information on General Averaging (GA) procedures and GA Problems.

"Jose Guerrero, president of independent claims consultancy Virtual Claims, told The Loadstar one of the key elements of GA was that “the goods and the ship must successfully reach the destination, otherwise, there is no general average”


"What options do GA appraisers/ cargo owners have while the ship remains in Egypt?

The appraiser in this case is the average adjuster, RHL, hired by the shipowner. The only recourse for the cargo owner is to work diligently with the P&I insurer, UK P&I Club, since any damage to the cargo under the bill of lading issued by the vessel is an exposure to the UK P&I Club."



"However, my immediate thoughts here in this Ever Given incident will hopefully help those who do not have much marine insurance experience.

Jose Guerrero is the author of Marine Cargo Insurance: Adjusting, Claims Administration, History"




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"If you have Insurance elsewhere, contact your insurance company or broker now to advise them of the situation, and tell them Richards Hogg Lindley has been appointed the General Average Adjuster. Your insurance company will open a file, contact the adjuster, and should follow up with you for any required documentation. You will need to ensure your insurance company does this timely or your cargo will be delayed at destination.

Richards Hogg Lindley (RHL)
4th Floor, Royal Liver Building
Pier Head, Liverpool
T 44 151 227 2175
F 44 151 227 2179
E info-liverpool@rhl-ct.com








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Egypt Arrest of Ship and Cargo Appealed. Hearing 5/4/21:



"UK Club, the Ever Given’s protection & indemnity (P&I) insurer, said the move was necessary as it had not been possible to resolve the issue without continued involvement of the Egyptian courts.

“The appeal against the arrest was made on several grounds, including the validity of the arrest obtained in respect of the cargo and the lack of supporting evidence for the (Suez Canal Authority’s) very significant claim,” it said.

The Suez Canal Authority said on Sunday that investigations into the Ever Given’s grounding were continuing alongside efforts to reach an agreement with the ship’s insurer and owner.

UK Club said last week the canal’s claim included $300 million for a “salvage bonus” and $300 million for “loss of reputation.”

A hearing on the appeal would be held on May 4, it said."



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"Maritime sources with knowledge of the Ever Given’s manifest tell American Shipper the following product categories are on the vessel, in order from the most twenty-foot equivalent units (TEUs) to the least: electronics, machinery and parts, household goods, furniture and footwear. For legal reasons, American Shipper is not allowed to provide exact percentages."


"

Household/personal products (19,820)China to UK (7,082)
Vietnam to US (3,478)
China to Germany (3,250)
China to France (2,431)
China to Netherlands (2,416)
India to USA (1,163)
Waste paper (11,456)USA to India (11,456)
Construction materials (10,766)Belgium to China (10,766)
Machinery/industrial parts (6,727)India to USA (2,240)
China to Netherlands (1,612)
China to UK (1,469)
China to France (1,406)
Textile, apparel & luxury goods (5,439)India to USA (4,189)
China to UK (1,250)
Auto components (4,728)India to USA (1,935)
Germany to China (1,653)
China to UK (1,140)
Food products (2,494)India to USA (2,494)
Metals & mining (1,452)USA to India (1,452)
Construction & engineering (1,364)India to USA (1,364)
Beer (641)Netherlands to China (641)
TOTAL (64,887)"





The list is intended to be representative of what is on the Ever Given, but not an accurate statement of the contents of the cargo on Ever Given.



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Details for widening the canal which would give more room to steer in windy conditions, and might prevent future groundings of big container ships.

“We will try to get two more tug boats, with pulling power of more than 200 tonnes - 250, 280, depending,” Rabie said.

The authority was also studying and planning a possible expansion of the southern part of the canal, the area where the Ever Given got stuck.

“If there is a 250-metre part that needs expansion, maybe we will make it 400 metres,” Rabie said.




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$115 M offer by Ever Given owners: ( Co Owner Lester Maritime )


"On April 8 law the firm HFW, acting for the ship’s owner Shoei Kisen Kaisha Ltd, set up an entity known as a limitation fund. Such funds are part of maritime law, governed by the International Convention on Limitation of Liability for Maritime Claims 1976, known as LLMC 76.

A spokesperson for HFW confirmed the move but declined to comment. "

"The limitation fund is a pot from which claimants can take until it is exhausted. It does not apply to salvage claims — ie claims related to the ship itself — or to general-average claims, which shares losses between the ship’s owner and its cargo customers. Shoei Kisen Kaisha Ltd declared general average in mid-April.

Experts told the famed shipping journal Lloyd’s List Intelligence that the issue at hand is which of Egypt’s massive claims are actually limitable under the fund.

The fund has been maxed out at $115 million, which — if applicable in the SCA’s case — would barely begin to cover Egypt’s demands, let alone any further claimants.

The $916 million SCA demands include $300 million for “loss of reputation” and a $300 million salvage bonus. Much of the definitions would be down to local law, experts told the outlet.

Nonetheless even a lawyer acting for one of the additional claimants told Lloyd’s List that the recourse to LLMC 76 is an “entirely reasonable” move. "



"A month has passed since the ship was freed from where it had been lodged across the canal — but the ship never got far.

Soon after it was dislodged, the Suez Canal Authority impounded the ship and its cargo, holding them in a body of water along the canal called the Great Bitter Lake."


"The UK Club, the Ever Given’s insurer, earlier said that the SCA claim is overblown. “The SCA has not provided a detailed justification for this extraordinarily large claim,” it said in a mid-April release. "









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Minor repairs needed in dry dock for Ever Given, past Port Said.

Does Port Said have sufficient depth to remove cargo from fully-laden Ever Given?

Can repairs wait till Ever Given is unloaded in Netherlands and Britain?


"According to a local agency contact, once an agreement has been reached on the SCA’s compensation claim and the vessel is allowed to sail, the most likely destination to discharge its 10,000 plus containers is Port Said. Then the ship can proceed to a dry-dock for repairs, said to be “relatively minor but necessary”.

Shippers will need to satisfy the average adjuster, Richards Hogg Lindley, with the production of the relevant documentation along with an Average Bond Form and Average Guarantee Form. Then, shippers granted a GA release after security has been provided will probably be required to pay again to relay their cargo to the final destination port."



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Imabari Shipbuilding owns Shoei Kisen Kaisha

"The fragility of trade routes - which have been sorely tested by disruptions caused by Covid-19 and a shortage of containers - were once again exposed when the large container ship Ever Given ran aground while transiting the Suez Canal on March 23, lodging herself against both banks.

The ship is about 400 meters in length, roughly equal to the height of the Empire State Building, and she is capable of carrying about 20,000 TEU. She is owned by Shoei Kisen Kaisha (a subsidiary of Imabari Shipbuilding) and time chartered and operated by Taiwanese container line Evergreen Marine.. Ever Given is registered in Panama and technically managed by the German ship management company Bernhard Schulte Shipmanagement.


Imabari Shipbuilding



Shipbuilding Industry in decline:



Does Imabari have other ships detained by Egypt? Elsewhere?



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$170m

But the 1,312ft-long ship is worth just $170m according to figures from maritime data provider Vessels Value. The Ever Given is owned by Japanese business Shoei Kisen Kaisha and is insured by UK P&I Club against third-party liabilities.Apr 15, 2021


Ever Given value is now $170,000,000.00, ($170m), at this time, according to Telegraph.co.uk





Is it cheaper to let Egypt keep the Ever Given?

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Appeal of $916m is denied, for now


"The Ever Given will remain anchored in the Great Bitter Lake after an Egyptian court upheld a previous ruling on Tuesday preventing the ship from leaving the country.

The court's decision came from the city of Ismailia, the same court that initially approved the seizing of the vessel. The decision arose from an appeal from the UK Club, the vessel's protection and indemnity insurer. Reuters reported the group said the original appeal was made "on several grounds, including the validity of the arrest obtained in respect of the cargo and the lack of supporting evidence for the SCA's very significant claim."

The massive Ever Given container ship grounded itself in the Suez Canal on March 23, blocking all traffic in the canal for six days. The Suez Canal Authority filed an approximately $916 million claim against the owner of the Ever Given, Shoei Kisen Kaisha Ltd., for compensation arising from the accident."





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Estimate of Ever Given Cagro value is $3.5 Billion.

"The court rejected a legal appeal by the ship owner against a ruling that granted the Suez Canal Authority (SCA) the request to impound the mega container ship as ongoing compensation talks lingered.

The Panama-flagged MV Ever Given, which is carrying cargo worth more than $3.5 billion, is owned by the Japanese firm Shoei Kisen and operated by a Taiwanese Evergreen Marine Corp."



"Cargo delays

The now-confirmed court decision leaves the status of Ever Given's cargo uncertain. The order specified that the vessel's 15,000-plus TEU of cargo cannot be unloaded for transfer to another vessel, as Evergreen had reportedly contemplated. The vessel's diverse cargoes - including La-Z-Boy furniture - may have to remain on board for an extended period.

When the cargo is eventually unloaded, the cargo owners (or their insurers) will have to post a general average bond covering their share of the cost of the salvage before they may retrieve their cargo. Shoei Kisen Kaisha has declared general average in connection with the grounding, and Richard Hogg Lindley has been appointed as the GA adjuster."



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"Calculation of Damages & Liquidated Damages: The Egyptian Perspective - Shehata & Partners


Calculation of Damages:
In 2018, the Court of Cassation has conducted a detailed study of the aspects relating to the calculation of damages. First, the Court underlined that pursuant to articles (170), (221) and (222) of the Civil Code, compensation is based on the principle of full compensation, as the Court must remediate every direct damage whether it was physical or moral including the direct loss and the loss of expected profits."



Civil Code of Egypt:




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Kenan West ship Detained by Egypt.


"The captain needs to be repatriated as the rest of the crew are already home. Maritime authorities in Egypt are saying that they do not object to the seafarers’ repatriation and that, instead, this is an issue of the court’s making. But the reality is that the maritime authorities could have been working arrange a reliever with the consent of the court and avoid, and thereby reduce the burden of being this ship’s ‘legal guard’ from weighing so heavily on one man’s shoulders. They should be trying everything.”

“The current situation condemns Captain Kara to remain in Egypt, with no income, unpaid and awaiting until the sale of this ship. It is not fair and breaches his basic and elemental seafarer rights. We hope that resolving this is dealt with as a matter of priority,” said Arrachedi."




MV Aman, ship detained by Egypt:

"This has to be one of the worst cases we’ve come across,” he said. “It’ is outrageous that after four years of serving as the legal fall guy for this ship, that the Egyptian port authorities still aren’t doing anything.”

Trowsdale said the federation this week wrote to the UN’s International Labour Organization asking the global body to step in over the chief officer’s treatment.

However, he says there is a ray of hope.

“The latest information we have is that the ship will be open to sale on the 24th of March. Everyone is hopeful a buyer will snap it up and move things along for this seafarer. This can’t go on.”

Reference: itfseafarers.org"





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Details of Court ruling on Appeal of detention of the Ever Given:


"The court, which had approved the detention of the ship following the submission of a report by the SCA, upheld that decision on Tuesday, rejecting an appeal made late last month.

The reasoning for the ruling was not immediately clear, but the SCA argued that the plaintiff had not notified all the required parties of its challenge to the ship’s detention within the required time limit.

The court heard the defense of Hazem Barakat, representative of the Japanese owner of the Panamanian ship, who demanded that a copy of the seizure order be provided. He said the captain of the ship has not been notified of the seizure decision.

Barakat demanded a 24-hour period to review and respond to all documents submitted by the SCA and argued that the ship’s seizure is invalid.

The SCA attorney said that an appeal should have been made during the specified dates, but the plaintiff failed to comply with that.

He added that the company’s lawyer should have informed all parties about its demands instead of procrastinating and requesting additional time, even though the company’s shipping agent is present on the ship daily."





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@Gladiator
Hope I'm not interrupting your monologue thread
but, here is the solution


1620323927307.png

Moi




🇨🇦
Why Isn't The N.W. Passage open?


 
Ever Given can appeal ruling up to May 20, 2021:


"The reasoning for the ruling was not immediately clear, but the SCA argued that the plaintiff had not notified all the required parties of its challenge to the ship’s detention within the required time limit.

The ship’s protection and indemnity insurer, UK Club, said the owners were reviewing their options in light of the decision, and had until May 20 to appeal.

UK Club and the Ever Given’s technical manager Bernhard Schulte Shipmanagement (BSM) have expressed disappointment at the ship’s detention.
lg.php

UK Club said last month the appeal was made “on several grounds, including the validity of the arrest obtained in respect of the cargo and the lack of supporting evidence for the SCA’s very significant claim.”



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