Thursday, October 21, 2021

Owner, insurers of grounded Suez ship face millions in claims

Dozens of ships are waiting at both ends of the canal, many with perishable cargoes.

Other News

The owner and insurers of one of the world’s largest container ships currently stuck in the Suez Canal face claims of millions of dollars even if the ship is refloated quickly, industry sources said on Wednesday.

The 400m, 224,000-tonne Ever Given ran aground on Tuesday morning after losing the ability to steer amid high winds and a dust storm, the Suez Canal Authority (SCA) said in a statement.

The grounded ship threatens to disrupt global shipping for days with dozens of ships waiting at both ends of the canal.

GAC, a Dubai-based marine services company, said authorities were still working to free the ship on Wednesday afternoon, and that earlier claims that the vessel was partially refloated were inaccurate.

The ship’s owner, Japanese firm Shoei Kisen KK, and its insurers could face claims from the SCA for loss of revenue and from other ships whose passage has been disrupted, insurers and brokers said.

Container ships of this size are usually insured for hull and machinery damage of US$100-140 million, insurers told Reuters. The cost of the salvage operation is also borne by the hull and machinery insurer.

“It is potentially the world’s biggest ever container ship disaster without a ship going bang,” one shipping lawyer said.

Martijn Schuttevaer, a spokesman for Dutch marine services company Boskalis, told Reuters its subsidiary Smit Salvage had been hired to help with the operation. A team of around 10 people is heading to Egypt.

In addition, owners of the cargo onboard the ship and on other ships stuck in the canal will likely claim from the ship’s liability insurer for losses to perishable goods or missed delivery deadlines, the sources said.

“If you have a constant build-up of ships, there are massive supply chain issues,” said Marcus Baker, global head of marine and cargo at insurance broker Marsh.

Follow us on Telegram for the latest updates: https://t.me/malaysianow

Subscribe to our newsletter

To be updated with all the latest news and analyses.

Related Articles