The recent arrest of the Ever Given by the Suez Canal Authority has added to the complexity of the unloading of its cargo. While cargo owners deal with this latest legal wrench, American Shipper has learned more specifics about the products stuck on the Ever Given, as well as the overall number of containers that were on the vessels delayed by the Suez closure.
According to supply chain management software provider E2open, the Ever Given is approximately 85% loaded. E2open is tracking about 10% of the overall load for its customers. Out of respect for the carrier’s privacy and its customers, E2open said it would not divulge additional details on specific companies or contents.
“The owners of cargo on the Ever Given are facing a different set of challenges since the ship is stuck again, now for legal reasons, for an uncertain period of time,” said Pawan Joshi, E2open’s executive vice president of product management and strategy. “Cargo owners have to now scramble to rebalance and reroute alternate goods to deal with potential stock-outs on retail shelves and shortages across manufacturing sites.”
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 fewest: electronics, machinery and parts, household goods, furniture, and footwear. For legal reasons, American Shipper is not allowed to provide exact percentages.
Frustrated cargo owners are pressuring the ship’s operator, Evergreen Marine Corp., to unload the Panama-flagged container ship, but that will not be an easy task.
“It would be an absolute logistical nightmare to get that vessel unloaded and reloaded onto other vessels,” explained Paula Bellamy, managing director of Ocean Wide Logistics (OL) Dubai. “Starting with the cost element of the double handling, there is cargo on board which is losing time with expiry dates. Customers also have no idea when they will be able to receive them. Then you also have customers with deadlines that come with penalty clauses.
“It’s a very sorry situation.”
Francisco Carreira-Pitti, senior partner at Carreira Pitti PC, the leading plaintiff firm in Panama and at the Panama Canal, explained the general average process now that the ship has been arrested.
“The vessel has been arrested, but the cargo cannot be arrested. Now more than ever, cargo owners have to arrange bonds to transship the cargo out of MV Ever Given,” he said. “The cargo has to be unloaded, individually or collectively. Bottom line, you need to reach agreements about the GA bond with the insurer and the average adjuster.”
Carreira-Pitti noted that a “flag arrest” in Panama is perfectly possible in the future to protect the right against the vessel. “This would freeze the Ever Given’s registration with the PMA (Panama Maritime Authority), preventing the owners from reflagging the ship and registering with a new mortgage and transferring it to a new ownership or changing its name.”
He added: “Having the Ever Given arrested in Egypt means recovery could be very speculative for cargo. It is not a good idea to have cargo owners file additional claims. A flag arrest in Panama is a better remedy since there are not competing claims such as the Suez Canal Authority.”
Impacted world trade by container
E2open analyzed the world’s trade that was stopped by the Ever Given blockage. Household/personal products topped the list. Below is a chart of the number of containers stuck on other vessels (TEUs).
|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 US (1,163)
|Waste paper (11,456)||US to India (11,456)|
|Construction materials (10,766)||Belgium to China (10,766)|
|Machinery/industrial parts (6,727)||India to US (2,240)|
China to Netherlands (1,612)
China to UK (1,469)
China to France (1,406)
|Textile, apparel and luxury goods (5,439)||India to US (4,189)|
China to UK (1,250)
|Auto components (4,728)||India to US (1,935)|
Germany to China (1,653)
China to UK (1,140)
|Food products (2,494)||India to US (2,494)|
|Metals & mining (1,452)||US to India (1,452)|
|Construction and engineering (1,364)||India to US (1,364)|
|Beer (641)||Netherlands to China (641)|
One of those U.S. importers is Tony Gualtieri, co-founder of Oleavanti. His Lebanese extra-virgin olive oil is sitting in a 20-foot container filled with approximately 6,000 liters of olive oil in barrels, bottles and bag-in-box packages in Malaysia.
His import was originally scheduled for April 28. Now because of the vessel delay, he is expecting his container by the end of May.
“Unfortunately, the vessel we are scheduled to be loaded on was one of the vessels stuck in the Suez, so she is late on her route,” explained Gualtieri. “We normally use the Malaysia to the Port of Los Angeles route. But the delays are so bad at the Port of LA now, once the vessel arrives it will take even longer for us to get our product.
“The Suez closure has me rethinking how to move my product the next time.”
Total US containers delayed
The categories of goods bound specifically for the U.S. fall into industries that have been experiencing lean inventories.
Gualtieri told American Shipper that for his future imports, he will no longer use the West Coast ports. Instead he will import to the East Coast and then transport the container by rail to the West Coast.
“It is cheaper and faster to use the East Coast route,” Gualtieri said. “I have learned a lot about logistics in the last year. Before we moved to the West Coast, we were based in Michigan, so we used either the NY/NJ or Halifax ports.
“We thought the Pacific route would be more direct for us now that we are based on the West Coast. It’s not. The port delays there are too long.
“Logistics management is very interesting. It’s down to the penny. Trade reminds me of those guys spinning plates. When everything is going great, it’s smooth. But when one thing goes bad, the whole system gets thrown off. This is trade now. All the pieces within the supply chain need to be harmonious and it isn’t right now.”