The Inside Story of the Ship That Broke Global Trade

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Getting to Egypt, by the way, was the most hassle I've ever had on a reporting trip. It was the fact that when I arrived in Egypt, absolutely no one wanted to talk to me. By going to the Suez Canal, I visited the Suez Canal control tower and seeing for myself how things worked. It was only by going to the litigation in the court, in Ismailia, and hearing the lawyers talk about the problems on the bridge, that we learned all this new information. A giant container ship is blocking the Suez Canal. One of the world's busiest waterways, the route is vital for the movement of everything from oil to consumer goods. Initially people blamed strong winds, but you know, it was never a very satisfactory explanation, simply because strong winds in that part of the world happened for about half the year. Bad weather may not be the main reason why the ship got stuck. It could have been a technical or a human error. That will be revealed through the investigation. According to evidence that was presented in an Egyptian court, the pilots at one point were arguing, shouting at each other, trading insults. So if this lasts for anything more than a day, it could cause major headaches for global shipping and energy markets. Why did this situation even occur in the first place? This ship is so huge. It's as long as the Empire State Building is tall. And it is blocking the entire width of the Suez Canal since it ran aground on Tuesday. I think most of us aren't aware of just how much global trade hangs by a thread. Hi, my name's Kit and I'm a reporter for Bloomberg. I thought it was critical to actually go to Egypt to report this story. I visited the Suez Canal Authority, I spoke to the chief pilots. I attended a couple of the court hearings and saw the ship owners lawyers make the argument for the first time that there had been some fault in the hands of the Suez Canal pilots. I'm Matthew Campbell. I am a reporter and editor for Bloomberg Businessweek. So modern ships of all sizes really, have something called a voyage data recorder on the bridge. The idea is to capture audio of everything that goes on. So in the case of the Ever Given, as in so many marine accidents, the evidence from the VDR became really critical to determining what actually occurred. The urgent effort to dislodge a cargo ship stuck in the Suez Canal, blocking a key global trading route. This is a traffic jam like no other. There was this rippling cascade of disruption to global trade, and therefore lots and lots of people who might argue that they lost money as a result of what occurred on board the Ever Given in late March. Then, the happenings on the bridge, what was recorded by the VDR, becomes a matter of incredible sensitivity because it is just crucial evidence. Ships have, with some exceptions, just gotten bigger and bigger over the last 30 or 40 years. The Ever Given, if you include the value of the ship, the value of the fuel on board, and the 17,000 odd containers it was carrying, it comes to about a billion dollars. This is one of the largest objects that humans have ever put on the ocean. There was a crew of 25 led by a captain named Krishnan Kanthavel, a very experienced mariner from Tamil Nadu. It had set sail from Asia, and was due to arrive in Rotterdam a couple of weeks later. In the Suez Canal, you typically transit early in the morning. So the Ever Given would've been emerging from the Red Sea, coming into the Suez Canal. There were terrible winds at that point, a whipping sand, a really severe storm. And enough wind, in fact, that some vessels decided that they did not want to proceed through the canal on that day. The captain of the Ever Given, Captain Kanthavel, would have had a choice about whether to proceed. It is always the final decision of the captain. But there are huge financial pressures on a captain in this situation. The shipping industry is a just in time business. A captain of his experience would be keenly aware that there were huge amounts of money riding on getting his cargo to Europe on time. If you look at the Suez Canal from a satellite, it looks like a fairly straight shot through the desert, with a couple of lakes on the way. And you would imagine, I imagined, that it wouldn't be particularly difficult to steer a ship straight through the passage. But actually, it's a very stressful thing to do, we're told by all all the sailors and captains that we spoke to. It's a very narrow gap in places, 200 meters or so wide, and quite shallow. So any mistake is liable to cause an incident of some kind. So when big ships come into narrow waterways, typically they will take on board at least one pilot. And a pilot is someone who really intimately knows a particular area and can advise the captain and the helmsmen of a ship who may not be familiar with that waterway on what to avoid, dangerous currents, submerged hazards, that kind of thing. They don't actually steer the ship, but they give instructions as to the best way to get through. They have to communicate with the captain and the other crew on the bridge of the Ever Given, which is a difficult conversation to have because the captain and the crew are mostly using English. The Egyptian pilots would mostly have been speaking in Arabic. So it would have been quite difficult for them to have a proper conversation. We were told by almost everyone we interviewed that the dynamic between the captain and the crew, and the local Egyptian officials, can be a tense one when they're going through Suez. And there's a few reasons for that. The captain is the master of his ship. In normal circumstances he has complete control over the crew. He's the boss. But when you go through Suez, you have to surrender some of that control to the local pilots whose job it is to steer the vessel through the canal. When you do speak to people in the shipping industry, you will quickly learn that Suez pilots have a pretty mixed reputation. We had lots of reports of pilots asking for cigarettes, for example, asking for other gifts in return for their cooperation in getting through the canal. And all of these things add up to make it quite a fraught situation. So the Ever Given comes into the canal in these very windy conditions, and you have to think about the scale here. This is a vessel that is 400 meters long. It's also, at the top of its containers, more than 50 meters above the waterline. So it really is an enormous surface for the wind to smack against. And what appears to have happened is the Ever Given began to act as a sort of sail and was swerving back and forth in the canal. And we know from some of the evidence that's come out in legal proceedings, that there was an argument on the bridge between the two Egyptian pilots. They were arguing about speed, the weather. And we know that when the captain tried to get in the middle of the argument and calm things down, one of the Egyptian pilots threatened to leave the ship, leave his post. At some point, as the vessel was swerving back and forth, one of the pilots, according to what we know from the voyage data recorder, gave the order to go full ahead. And that would have taken the Ever Given's speed to about 13 knots. And speeding up is supposed to give you more control. It gives you more purchase on the rudder when you're trying to steer one of these enormous ships. And in normal circumstances, that would be a good way to regain control. But, the situation at that moment, it was the worst thing they could've done because the ship is in such a narrow channel that increasing the speed actually, conversely, can make it much harder to control because of something called Bernoulli's Principle. And the basic idea is that as water rushes faster, or any fluid rushes faster, the pressure decreases. And because there's less pressure, the vessel is sucked toward one bank or the other. That then became a problem as the captain, and the helm, and the bridge crew, fought to keep control of the vessel. There were, according to what we know from the voyage data recorder, orders given in rapid succession from the pilots to go hard to port or hard to starboard. So eventually one of these turns went past the point where it could be recovered, and the bow of the Ever Given lodged right into the sand. The ship just slows down, and then suddenly you realize you've crashed. So the Ever Given was stuck in one of the southern reaches of the canal, quite close to the southern entrance. Now, the Suez has been expanded over the years. Most recently in 2015. Critically, those expansions have been aimed at allowing two-way traffic, for the most part. Because, originally, the canal was only wide enough for vessels to go in one direction at once. However, where the Ever Given was stuck was a one-way section, there was no bypass around it. Somehow when they crashed, they managed to not only wedge the front into the deserts, but the back of the ship also grounded as well. So the ship was left diagonally wedged, completely blocking the channel. By the end of the first day, there would've been a hundred or so vessels anchored waiting to transit. And that number grew steadily hour by hour. Every day, goods worth $10 billion were arriving at the canal waiting to go through. Look around you in any room you happen to be in right now, the vast majority of the objects in that room will have come to you on boats. And if you live in Western Europe, if you live in North America, it is very likely that those boats pass through the Suez Canal. So every company that deals with physical stuff depends on this waterway in one fashion or another. So having it blocked is just a titanically important problem. And one that there were billions of dollars riding on resolving quickly. The 400-meter long cargo ship, the Ever Given, is stuck in the Suez Canal. And it is fouling up global trade. 50 ships a day normally pass through the canal, carrying 12% of the world's trade. So the pressure is really on to get her refloated. The ship crashed at such speed that the front went six or seven meters directly into quite rocky sand. Two tug boats arrived very quickly. They were just routine tug boats, they weren't especially large or powerful. But they immediately made efforts to pull the ship free. And it didn't move an inch. It was clear it was firmly stuck. The main entity with responsibility for clearing the canal and freeing the ship is the Suez Canal Authority, which is the Egyptian government entity that controls the canal. And the man in charge of the pilots at least is the chief pilot, Captain El-Sayed. And he was one of the first on the scene. And he, with his boss, chairman Rabie, put together a plan to try and get the ship free. Initially they realized that that simply pulling probably wasn't going to be enough. They would have to dig as well. The front of the ship was wedged so deep in the bank that they would need to do some digging. One of the earliest photos we have is of a small yellow excavator, right up against the front of the ship, just scooping out scoop after scoop of sand. And you know, it looks ridiculous next to the size of the vessel, it looks hopeless. This somewhat anonymous Egyptian guy became a global internet celebrity when photos of this went viral. Just a kind of metaphor for being stuck in a hopeless task. The vessel's owners quite quickly hired a Dutch firm called Smit, who are one of the most prominent salvage firms in the world. So a team of experts from Smit flew in, from the Netherlands and elsewhere, and see if there was a way that they could help get this ship off. Salvage teams are awarded a percentage of whatever they save, generally. There are different ways to pay them, but that's the traditional fashion. Now, if you're a salvage crew and you save a big, fully-loaded oil tanker, for example, from sinking, you could be in line for tens of millions of dollars. So the team from Smit arrived on the morning of March 25th. So that's about two days after the grounding. The view of these salvage experts from Smit was that preparations needed to be made immediately to begin bringing containers off, hiring a crane, coming up with a plan to offload these big, very heavy boxes, in order to lighten the vessel. Now, there were some people at the Suez Canal Authority, is our understanding, who were more reluctant to consider that option. I think they worked out it was gonna take months to completely offload the containers from the Ever Given. So they were facing a much longer delay, and a much longer blockage, if they had to try and take the containers off. So the compromise that was arrived at was towing would proceed until the time that a crane arrived. And then, if at that point, the vessel was still stuck, they would begin unloading it. In a situation where every day the canal is closed costs the world economy billions of dollars, no one felt they had time to wait. On the 28th of March, that was a Sunday, you had two very powerful tugs turn up from the south. Combined had something like 200 or 300 tons of pulling power. The tide is, of course, very important. You want more water, that means more buoyancy, more ability to lift the ship clear of whatever it's stuck on. There was actually, at the end of March, a supermoon, a time when the moon is unusually close to Earth. Tidal peaks are higher. So if you happen to be trying to get a 400 meter container ship off of a sandy bank, that's potentially quite important because you have more water to work with. So everyone knew that March 28th to March 29th was the best opportunity for weeks that the salvers were going to have to pull the Ever Given clear. There was no sudden movement or noise. They just suddenly realized their tugs, instead of treading water, were moving, and they were moving because the back had very slowly started to move away from the bank. So the rear was freed first, but the front was still wedged. One of the worries was that when the bow did finally come free, it would swing clear across the canal. First of all, potentially doing terrible damage to anyone who was in the way, which included lots of vessels from the Suez Canal Authority, and potentially also swinging right into the opposite bank, grounding itself again. So during the towing operations, the crew of the Ever Given had helped set up cables from the bow of their vessel to shore, four in total, so that when the bow did finally come clear, it could be held from swinging right across the canal. Smit came up with an idea to take on ballast water into the ballast tanks of the rear of the Ever Given. The back is pushed down and the front is lifted ever so slightly. That slight lift of the front turned out to be just enough to help them lift out of the sand. So when the tide changed, and the waters were flowing out, and the two powerful tugs were pulling in the same direction, that was when the front finally came clear. And when that happened, everything happened quite quickly. There was jubilation, as you can imagine. They all sounded their horns at the same time, it could be heard from miles away. One of the Egyptian dredges was cheering and shouting number one, number one. So once the Ever Given was free, it was towed up to the Great Bitter Lake, which is a body of water partway up the canal. And it sat there during what became a pretty tense legal standoff. You had the Suez Canal Authority, which is part of the Egyptian government, demanding compensation of more than $900 million in exchange for letting the vessel go. Now, the Egyptians claimed that part of this was a so-called salvage award, which is the percentage of value that you're entitled to when you rescue a vessel. Part was also for what amounted to reputational damages. The owners of the Ever Given, and frankly, a lot of people observing this around the world, thought that figure was absurd. The Egyptian government reduced their ask to 550 million. I think it's probably a safe bet that the settlement came in somewhat below that, but we just don't know. In any case, it is a great deal of money. One of the amazing things about shipping is that it's kind of invisible to most of us. The ships have become too big for ports in Manhattan, or in East London, so the ports have moved elsewhere. So actually, shipping has kind of receded from view. But in that time, it has become an even more important part of our lives than ever before. Everything we depend on, all the material goods, all the energy, all the oil we put in our cars, everything we shop for at a place like Ikea or Walmart, it all comes on ships. For about a week, the whole world was riveted by shipping, and also understood in some ways how fragile it is. And all it took was one wrong turn, effectively, for that to all be shut down.
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Channel: Bloomberg Quicktake
Views: 93,501
Rating: 4.8943448 out of 5
Keywords: News, bloomberg, quicktake, business, bloomberg quicktake, quicktake originals, bloomberg quicktake by bloomberg, documentary, mini documentary, mini doc, doc, us news, world news, finance, science, evergiven, shipping, covid-19, pandemic, supply crunch, supply chains, international economics, evergrande
Id: iVJ94tM7pNA
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Length: 18min 15sec (1095 seconds)
Published: Tue Sep 21 2021
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