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Assessing container casualties from the Ever Given Suez Canal incident

As of 29 March 2021, reports suggest that the combined efforts from rescue workers of the Suez Canal Authority (SCA), salvage experts and heavy equipment to release the 400m-long container ship, Ever Given from the shoreline have been successful. The 200,000-ton ship appears to be partially floating. In the afternoon, the salvers managed to refloat the vessel. The vessel will have to be inspected for any damage to its structure, propellers, etc.

There have been several similar incidents that have occurred recently, resulting in significant container casualties and cargo losses. One noticeable example relates to a ship, ONE Apus, losing some 1,800 containers and damaging hundreds more in the Pacific Ocean during its journey to the US from China on 3 December 2020.

This incident alone was worth more than $200 million in debt for the marine market, in addition to extra work for the companies that deal with such claims. The marine market is under pressure as there are not enough containers available to travel from China to Europe and North America — hence these containers are in high demand.

However, the incident in the Suez Canal has not had such consequences: the vessel has a capacity of 20,000 TEUs and hasn't suffered losses with the exception of the perishable cargoes with a limited shelf life. Normally, damage to containers and the cargo are insured. But in this specific instance, the incident has not caused any physical damage to the cargo carried in the dry containers and I suspect there won't be any cargo claims.

But the stranded Ever Given has been blocking one of the world's busiest trade routes for the past week, since high winds and a sandstorm knocked the ship off course on Tuesday 23 March. The congestion has forced some shipping companies to reroute around the Cape of Good Hope, causing major delays and disruption to the supply chain, with potential damage to cargos carrying perishable goods. It's understandable that the ongoing incident at the Suez Canal has attracted significant media attention.

Inspections will now be carried out in order to determine the cause of this incident and lessons learned. The salvage operation will prove to be extremely expensive. Theoretically, the vessel owner / P&I club will ask cargo interest to participate in the salvage expenses. From an insurance perspective, a distinction must be established between the damage caused to the containers, the cargo, the damage caused to the ship itself and the expenses incurred to re-float the vessel.

For more information, visit our website. Please contact us with any questions or to assist with any cargo claims that arise from this event. To report claims originating in the U.S., contact: marineclaims@sedgwick.com. To report claims originating outside the U.S., please contact info.marine@nl.sedgwick.com.

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  • Stacey Allinger

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