Suez Canal Closure Cost an Estimated $10 Billion a Day

The Suez Canal may be open again, but the battle over damages from the waterway’s longest closure in almost half a century is just beginning.

With cargoes delayed for weeks if not months, the blockage could unleash a flood of claims by everyone affected, from shipping lines to manufacturers and oil producers.

“The legal issues are so enormous,” said Alexis Cahalan, a partner at Norton White in Sydney, which specializes in transport law. “If you can imagine the variety of cargoes that are there -- everything from oil, grain, consumer goods like refrigerators to perishable goods -- that is where the enormity of the claims may not be known for a time.”

The giant Ever Given container ship was pried from the bank on Monday, and traffic through the canal -- which connects the Mediterranean and the Red Sea -- resumed soon after. The blockage began when the vessel slammed into the wall last Tuesday and was the canal’s longest since it was shut for eight years following the 1967 Six-Day War. The incident offered a reminder of the fragility of global trade infrastructure and threats to supply lines already stretched by the coronavirus pandemic.

The Ever Given, which moved north from the southern part of the canal where it ran aground to the Great Bitter Lake, is being inspected for damage. Those checks will determine whether the vessel can resume its scheduled service and what happens to the cargo, Taiwan’s Evergreen Line, the ship’s charterer, said in a statement.

Egyptian authorities were desperate to get traffic flowing again through the waterway that’s a conduit for about 12% of world trade and around 1 million barrels of oil a day.

A backlog of hundreds of ships built up. There were 421 waiting to transit through the canal at 8:00 a.m. local time, according to Inchcape Shipping Services, a maritime services provider. The waterway usually handles around 50 a day, but will probably transit significantly more than that in the coming weeks.

“Coordinating the logistics of who gets to go through first and how that’s going to be sorted out, I think the Egyptians have quite a job on their hands,” John Wobensmith, chief executive officer of Genco Shipping & Trading Ltd., said Tuesday in an interview with Bloomberg Television.

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