Can another Suez Canal blockage be avoided? | Inside Story

the cargo vessel blocking the suez canal is set free the disruptions cost billions of dollars in trade so how long will it take for business to resume on one of the world's busiest shipping lanes and can another mishap like this be avoided this is inside story hello and welcome to the program i'm muhammad zhum a major disruption to global trade is closer to being resolved salvage crews have refloated the ever given a container ship that's been wedged across egypt's suez canal for nearly a week it created a major traffic jam on the main shipping route between asia and europe billions of dollars worth of trade has been lost experts are now trying to move the vessel so other ships and tankers can finally pass alexi o'brien reports finally on the move the ever given being towed down the sewers canal after being stuck for almost a week celebrations began before dawn as the massive container ship was first partially refloated [Music] despite an international rescue effort the vessel had been wedged across the waterway which is one of the busiest in the world since tuesday dredgers and diggers have removed thousands of cubic metres of sand from underneath the ship and a flotilla of tugboats has worked on dislodging it it's forced tankers and cargo ships to queue at either end of the canal delaying global trade each day that passes there's about seven to eight billion dollars worth of goods which would usually pass through the canal so a week later you're talking 45 50 billion of delays really as much as anything we will catch up on some of that but there will be ongoing days it's hard to put a figure on it and of course some cargos may have perished because they were time critical they'll be in no doubt some big insurance claims going in the crisis is having an impact on syria the authorities are rationing fuel as suppliers from iran are stuck some vessels are carrying livestock cotton from india for clothes and auto parts from china well we've got 20 containers on board and the cargo ranging from vinyl flooring through the foodstuffs pump parts and of course our clients are very concerned that we're not going to get their goods in time she was due to arrive in felixed this good friday and i can't really see her arriving for at least another seven maybe to 14 days experts say the blockage raises long-term questions about the canal's sustainability i think what's happened is that container carriers have got larger quite rapidly and so i think this particular accident was really waiting to happen there's got to be a lot of head scratching and thinking not only about making supply chains more resilient but i'm sure the suis canal authority is having a good heart think as well about how to make the canal itself more robust despite the progress the salvage company warns there are still challenges and even with the ever given underway canal authorities say it will take days for the backlog to clear alexi o'brien for inside story all right let's bring in our guests in london stuart neal communications director at the international chamber of shipping in copenhagen christian buga professor of international relations at the university of copenhagen in zurich maggie mandur a political analyst welcome to the program christian one of the things that keeps coming up in the discussion about all this is the size of the ever given this is a mega ship it is massive it is almost as long as the empire state building are ships these days simply getting too big and will accidents like this continue to happen the more the size of these ships increases ships are indeed getting bigger and bigger in this case the ever given is larger than an aircraft carrier it's 400 meters in length it carries 20 000 shipping containers and it is not surprising in the end that we are seeing increasingly accidents and perhaps we should also not forget that this was not the first incident with this particular ship there was a collision in 2019 which was equally linked to wind so yes the risk is clearly increasing maggot what is the fallout of all of this going to be for egypt especially in the short term um well i would say it's basically um highlighting the uh importance of uh of of of the country and the position that the stability um of this uh of this uh part of the world uh uh plays um in the short term i don't see really uh any uh let's say a major implications um domestically the regime is going to try to play this out as a success which relatively uh it was but internationally uh of course there will be more concern um not just uh towards the logistics of um the canal but the long-term uh prospects of the regime and the possibility of course of the disturbances considering the uh situation in in the country and the and the uh implications that this might have on trade and shipping globally stewart what are the steps that are going to need to be taken now to clear the backlog in the suez canal and how long do you think that's going to take well it's going to take some time i think from our understanding there is concern about some of the uh ships that are taking livestock and those i understand will be prioritized but it is going to take quite a few days because of course the ship the the canal at that point is a one-way journey you can't you know dual carriageway there so we're going to have to move ships that are coming from europe to asia and from asia and middle east to to europe so that's going to take quite a few days to get through my understanding is there's something in the region of 360 350 ships backing up at the moment and some are as as you may have reported making the longer journey around the cape of good hope and and the other side of africa christian from your perspective has enough attention actually been paid to just how crucial maritime routes are for global trade and what the security implications are about all of this the current suicide crisis is clearly a wake-up call and makes us aware of how dependent we are actually on the sea and there's this phenomenon that we always often describe as sea blindness we lack awareness of how dependent we are on the sea and this is of course radically different now with global supply chain management and so on and that of course also has an implication for how we regulate the shipping industry and in how far we are having a discussion on what is safe and what is not maggie could you tell our viewers a little bit about just how important the suez canal is for egypt i mean both strategically and symbolically uh you know for national pride purposes as well yeah so so uh historically uh the canal has let's say uh occupied a very uh special place in the uh in the uh a popular uh imagination um it was basically the rallying cry of the nationalist uh movements its nationalization by nasser was let's say the foundation of his regime um and uh so it's a very let's say uh important uh symbol um of um of um of let's say national uh pride uh of course economically the revenues are about 1.5 percent of of the gdp so it doesn't seem that much however it is indeed a critical in terms of the provision of let's say um hard currency the most important part of this is that it shows the importance of the country uh strategically to the world um so if there are any blockages in the canal the whole world will uh will take uh notice so um in short it is a very important canal historically and currently stuart considering what happened how are shipping companies looking toward how egypt has handled what has occurred in the suez canal is there a lot of concern growing about continuing to use the suez canal are there discussions taking place among shipping company executives about trying to perhaps take other routes see is that the suez canal is a a key uh transit route for the shipping industry um it you know we're talking about um you know 12 percent of global shipping trade and if you think the globally you know about 14 trillion dollars worth of product is shipped by the shipping industry per year it is a key a key route because you know anything up to an additional 12 days of transit um if if you have to go around the the africa so i i don't think it's a um that's an issue because the reality is the the sewers canal normally runs perfectly well probably about 50 52 ships a day on average well over 18 000 ships last year so you know it's not really it's a short-term issue we'll overcome this the shipping industry is very resilient you know and i christian's point about its sea blindness is probably because the shipping industry just gets on and does its job christian from your perspective what are the lessons that need to be learned from all of this for the shipping industry and for global trade going forward well first of all we have to see this in context that this is about much more than short-term economic costs it raises the question what are actually the vulnerabilities of our current transport system are other routes equally vulnerable what does the trend towards the mega container vessels actually imply for the safety of navigation in different parts of the world and then what kind of public response do we actually need both in terms of safety operations but also in security operations and let's not forget there are also other vulnerabilities out there and that ranges from piracy incidents in the gulf of guinea for for instance then the spillover of the conflict in yemen up until geopolitical tensions as we can see it in particular in the or for moose so we literally need to see the uh the global transport maritime transport system uh as a whole and carefully assess what are the vulnerabilities and where is it up to the shipping industry to take care of it themselves and when is it that actually the public the state government needs to kick in maggot the egyptian government expanded the suez canal in 2015 it's my understanding that it was a different part of the canal where the expansion happened not where the ever given was stuck you know from your point of view is there now going to be a push to try to expand the suez canal further and is that something that can even be done i would be very surprised if there is uh because the first expansion was basically built up as the basis for uh for um let's say an economic uh revival um this uh this again plays into the popular imagination of the canal so the cost of the project was about eight billion uh with um kind of expectations or the government stated that they're expecting the revenues of the canal to uh a double uh in the domestic media some very let's say um outlandish uh figures were um were stated uh that were never achieved so so the the the um the increase in the revenues was really minimal um so from uh from an economic return uh perspective i don't really believe that that uh that um that it made sense to to the point where um cece himself said that the project was to raise a national uh morale um after it became clear uh that the projected revenue uh figures were not um let's say um realistic so the uh so the idea of doing another expansion doesn't really serve the regime well at least uh domestically and now the focus is uh is on this new uh administrative uh a capital which is another multi-billion dollar uh project i think it's um the budget is around 58 billion and the plan is to open up the first phase by the end of this year so i don't really perceive that it would play well for the regime to do another project similar to that one stuart a moment ago christian was talking about the lessons that ought to be learned by the shipping industry in the wake of what has occurred in the suez canal let me ask you uh do you believe those lessons will be learned uh or will it just go back to business as usual no i think the the industry's got a fairly robust security regime whether that's through the international maritime organization which is the global regulator part of the united nations right through to port state control and the requirements of an assessment of what happened in this instance so we as an industry very well regulated very well focused on safety because you know it's our prime requirement um so we will learn lessons we need to learn lessons and if there's anything that needs to be adapted and changed that certainly would be incorporated into any of the arrangements going forward be that regulation or operational requirements christian when it comes to liability claims um who do you think ultimately is going to be held responsible for all of this this one obviously will be one of the largest legal cases ever and i very much look forward to follow this over the next years and if not decades but let's not forget uh we always also have to ask uh which of these responsibilities will lie with the shipping industry uh was there a problem with navigation was it uh largely linked to the winds and uh what kind of accidents like this are predictable in the in the future let's not forget it was not a particularly good year for shipping so far we had two incidents of major container loss in january in february and if we zoom even further out last year we saw a major oil spill in mauritius but then also the bywood disaster and i think all of these are incidents that really call for more attention to uh how the shipping industry is is regulated but then also what are the the good guys and the black sheep in that business so these are the kind of questions that we need to ask and not only now in the current crisis but also more long term in the future maggot a lot of analysts have said that what's really needed right now is a a thorough and transparent investigation um and what i want to ask you is is that something that's going to be possible you know in egypt right now well let's say the regime doesn't have the best traffic uh track record of that um so the possibility of that is limited unless there is let's say enormous international uh pressure to have a thorough and um transparent uh investigation uh the tendency of of the regime historically when something like this happens is to try to find the is to try to shift the blame to somebody else and not really take responsibility if the blame actually falls with the government which is not clear at the moment so the quick answer is no uh but with a butt because uh the the the situation is really global in scale um so the room for maneuver i would say is rather limited and i think that they might be forced to to to do that stuart how much is all this uh going to impact freight costs and when do you think we can expect the cost of these delays is going to be passed on to consumers well i think the the reality is that a lot of this is insured most most of the cargos will be insured so whilst there will be delays and there may be some increases the reality is that as christian talked of you know we're going to see a very long and protracted legal action rather than stopping the operations what we do see though is that ships that would have been through the canal picking up something else they will be delayed and if those are products that are sort of food they may have gone off so there will be some cost in that and obviously the industry is working hard by either re-routing or doing what it can to ensure that that doesn't escalate and of course this comes on the back of the crew change crisis and you know we're still seeing um seafarers being denied access to get on and get off ships which is causing a real constraint for the industry and that's something that we've been very concerned about throughout the whole last year with the coronavirus outbreaks yeah christian i want to ask you to follow up a bit on what stewart was just saying there because this situation is really only further complicating these supply chain problems that have been caused by the pandemic right i mean how has the pandemic impacted shipping in the past year i think the crucial the most crucial uh dimension here is clearly the crew change problem and many of the crews have been on uh on vessels now for an enduring period of time and that quite obviously also leads to fatigue and we we are going to see in the investigations in in what way this has played a role in the swiss accident uh we know already that it has played a role in other recent marine accidents such as the mauritius oil spill for instance so quite obviously there has been the significant impact on uh from covet uh and this risk canal crisis quite obviously comes at the worst uh imaginable time possible because levels of shipping were just back to um to normal from the pre-pandemic times so that's really really a tricky tricky bit we are in but my prediction is that uh both because of the trends towards the mega vessels but also uh considering climate change and more severe weather events we are going to see many more marine accidents in the future and that quite obviously is not necessarily good news megan you said earlier that the egyptian government is really sort of claiming success right now i want to ask you if you think from your vantage point that shipping companies really believe that the canal is going to be fully operational soon or are they moving ahead with contingency plans well i think that's very hard for me to tell i think in the next maybe day or two things will be clear but my understanding is that uh some shipping companies have now moved on to the contingency uh uh plans uh considering that the queue was around 350 ships but i think considering the capabilities available uh the government did do a relatively good job in being able to to free the ship stuart what can be done to prevent this from happening again well as i say i think we need to learn the lessons we do need to look at if there are any um issues that were specific to this this occasion but the reality is that you know 90 percent nearly 90 percent of everything that you and i and everyone have use eat food cars um even the ppe that we're all needing at the moment that gets transported by ship so you know the shipping industry globally has to carry on and and that's what it will do all right we've run out of time so we're gonna have to leave the conversation there thank you so much to all of our guests stuart neil christian buga and maggid mandur and thank you two for watching you can see this and all of our previous programs again anytime by visiting our website aljazeera.com and for further discussion go to our facebook page that's facebook.com forward slash aj inside story you can also join the conversation on twitter our handle is at aj inside story from me mohammed jim jroom in the whole team here bye for now you

Channel: Al Jazeera English

Views: 278,248

Keywords: al jazeera, al jazeera english, aljazeera, aljazeera english, aljazeera live, aljazeera news, business and economy, egypt, egypt latest news, ever given, ever given container ship, evergreen, evergreen marine, international shipping, middleeastnews, oil prices, suez canal, suez canal authority, suez canal blocked, Suez Canal, suez, ship, container ship, logistics, port, trade, economics, economy, shipping, why, mapped, map, explained, vessel, shortage, traffic, congestion, suez blockade explained

Id: yEdjM7ztgro

Length: 23min 45sec (1425 seconds)

Published: Mon Mar 29 2021