Ever Given cargo remains in Egypt as insurance matters remain unclear

The Ever Given, one of the biggest Ultra-Large Container Vessels (ULCVs) in the world, ran aground in the Suez Canal at approximately 7 am local time near kilometer-marker 151 on Tuesday, March 23, 2021. SMIT Salvage, part of Dutch dredging and marine services group Boskalis, was the appointed salvor.

The ship was successfully refloated on March 29 after an effort involving several tugs and dredging. The ship was towed to the Great Bitter Lakes, a wide area within the Suez Canal itself, and has remained there ever since, following its arrest by Egyptian authorities.

Bernhard Schulte Shipmanagement (BSM), as technical managers of the vessel, have confirmed that extensive inspections from the American Bureau of Shipping (ABS) have been concluded, including underwater inspections.

Based on these thorough inspections, the vessel has been declared suitable for onward passage to Port Said where she would be assessed again before departing for Rotterdam.

However, BSM were informed by the vessel’s owner that the Suez Canal Authority (SCA) began arrest procedures against the vessel and that it will remain anchored at the Great Bitter Lake until an agreement between the SCA and the vessel’s owner has been reached.

The Suez Canal Authority’s decision to arrest the Ever Given, following the six-day closure of the waterway, as leverage for its $916m insurance claim against the vessel owner, is likely to further delay the insurance processes involved, specifically the process of declaring General Average.

There is still a good amount of uncertainty about what will happen with the 18,000 containers on board the vessel and the consequences of insurance matters for consignees, shippers and others involved in the supply chain.

Jose Guerrero, president of independent claims consultancy Virtual Claims, said one of the key elements of General Average was that “the goods and the ship must successfully reach the destination, otherwise, there is no general average”.

However, with the ship arrested, the prospect of cargo being released has diminished, as there is little practical option of unloading it at anchor in the Bitter Lake area and transhipping the boxes to another vessel. The Ever Given will need to get to port for any sort of unloading to begin.

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