You’d think that after suffering the Ever Given being wedged in its very important canal for six days, the Egyptian government would be thrilled to see it go. You’d be wrong.
Update Tuesday, April 13, 1:35 p.m, EST: It’s likely that insurance companies will handle the cost of getting the Ever Given out of hock, according to Bloomberg. At least 15 companies could be on the hook for the bill, including those with cargo aboard the Ever Given. It looks like Egypt could get its $1 billion asking price. The investigation into the incident will likely wrap up by the end of this week.
The 25-person crew of the Ever Given are still performing their duties and are being paid per union agreements. The Ever Given’s owners filed a General Average claim, which Business Insider describes as: “...a principle of maritime law that requires any of the ship’s customers to share the risk and costs involved if the ship faces a tragedy or failure.”
This isn’t going to be a cheap or easy fix for the Ever Given’s owners, according to the Wall Street Journal:
“The vessel will remain here until investigations are complete and compensation is paid,” Osama Rabie, chairman of the Suez Canal Authority, told state television in Egypt on Thursday.
“We hope for a speedy agreement,” he said. “The minute they agree to compensation, the vessel will be allowed to move.”
Mr. Rabie didn’t say Thursday what amount Egyptian authorities were seeking as compensation. But he said last week that Egypt would demand $1 billion for the cost of the operation to free the ship, the loss of transit fees—an important source of foreign currency for Egypt—and other costs from the blocking of the canal, which caused a traffic jam of more than 400 ships on either side of the channel.
Cue Dr. Evil laugh.
Really, $1 billion is chunk of change compared with what Egypt lost while the Ever Given was jammed in the Suez Canal, blocking all traffic. Egypt lost $95 million in transit fees alone during the six-day closure. That doesn’t include the cost of the repairs that will have to be made to the canal itself or the overtime for the folks who helped free the monster container ship. The Japanese owners of the Ever Given say they are currently in negotiations with Egypt, but as yet no one has told them officially that the ship is being held as collateral.
Shoei Kisen Kaisha Ltd., the Japanese owner of the Ever Given, said it hadn’t officially heard from the Egyptian authorities that they wouldn’t let the ship go unless the company agreed to compensation, according to company spokesman Ryu Murakoshi.
“It is true we are in the middle of negotiations with them,” he said, while declining to say how much compensation the company was being asked to pay. He said the company was cooperating with the Suez Canal Authority in the investigation.
The ship was freed on March 29 and moved to the Great Bitter Lake, a sort of holding area within the Suez Canal. It’s been hanging out in the lake, along with its 25 person crew, ever since. During that time Shoei Kisen Kaisha Ltd has done everything it can to protect itself from liability. The investigation into how the Ever Given became stuck in the canal is ongoing.
With all the multinational corporations, governments, labor unions and insurance companies involved in this fiasco, I wouldn’t bet on the Ever Given moving any time soon. You’ve got to feel for the 25-person crew, however. Even if they did something to massively screw up international shipping, no one deserves to be trapped at work this long.