Transportation & Logistics Analysis

Freeing up of Ever Given: our advice to importers

June 29 2021

The container ship Ever Given should soon be able to sail again, as a financial agreement is in sight. Affected importers must prepare for this deadline.

A financial agreement seems to be in the process of being concluded between SCA, the managing authority of the Suez Canal, and Shoei Kisen, the owner of the container ship Ever Given. This agreement paves the way for the release of the vessel, which has been immobilized with its load and crew since its grounding, even if all the legal proceedings are far from over.

This is obviously good news for the crew, who are undoubtedly starting to find the wait long… but also for many European importers. Before being able to undertake a new deep-sea voyage starting in the Mediterranean, the ship will have to undergo a technical inspection in a port. In all likelihood, its seaworthiness should be confirmed. 

Mandatory withdrawal of goods 

Meanwhile, importers who have goods on board have a vested interest in preparing for their arrival.

  • It is now time to complete the drawing up of bank guarantees with the general average adjuster in the hope of quickly withdrawing the goods in European ports.
  • Legally, the delay is not a sufficient reason to abandon the goods at their destination. It is in the importer's interest to make withdrawals quickly, in order to avoid any penalties.
  • Business discussions on the full payment of the transportation service can be initiated on a case-by-case basis. However, it is advisable to carefully negotiate any possible compensation, because the general case provides that the freight rate initially agreed is due in full to the company.

What impact on the global offer?

In addition, in the weeks following the return to service of the Ever Given, it will be interesting to observe the fate of this ship, which has been absent from rotations for several months. Three options are possible: the company can decide to reintegrate it into an existing regular service, use it on an ad hoc basis to help reduce congestion at North European terminals or use it to bring empty containers back to Asia on a massive scale and quickly, without offering any trade capacity.

Could the return of the Ever Given in global maritime rotations disrupt the upward momentum in freight rates? Of course, the 20,000 TEUs it offers are just a drop in the ocean of global capacity. But in a period when shipping companies are managing supply with surgical precision, an impact, albeit momentary, cannot be completely ruled out.

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Expert in Ocean shipping for 25 years, Jerome puts all his knowledge of the industry to contribution for Upply. Ship captain at heart, he has written the English-French Lexicon of Containerized Shipping (Paris: CELSE, 2001).