News / Cargo owners still 'in the dark' as Ever Given compensation row heats up

Photo: Suez Canal Authority

The stand-off between the Suez Canal Authority (SCA) and the Japanese owner of the 20,124 teu Ever Given over compensation has entered a third week.

Meanwhile, European cargo owners are still none the wiser as to when and where their containers will be made available, or the percentage of the value of their cargo that will be required by the average adjusters in the form of an insurance bond or cash deposit.

The vessel was re-floated on 29 March after becoming wedged across the waterway for six days, and was moved to the Great Bitter Lake convoy assembling point for surveyors to assess any damage to the hull.

Owner Shoei Kisen Kaisha confirmed on 3 April that an underwater inspection of the ship had taken place the previous day and the results passed to the vessel’s classification society, the American Bureau of Shipping (ABS), which would “determine what, if any, repairs may be required”.

Shoei Kisen Kaisha added that it would “continue to fully cooperate” with the SCA in its accident investigation and had submitted to the canal authority nautical information data from the ship’s VDR (black box) recording device. It also confirmed that the crew were “in good health”.

Since then, however, there have been no further updates from the shipowner, while negotiations have continued with the SCA – reported to be demanding $1bn in compensation to cover the costs of freeing the vessel and the estimated $100m loss of transit fees.

SCA chairman and MD Admiral Osama Rabie said the authority had “spared no effort” to salvage the stricken ship, deploying 15 tugs, two dredgers and 600 personnel to the casualty.

“The vessel will remain here until investigations are complete and compensation is paid,” he told The Wall Street Journal.

According to a local agency contact, once an agreement has been reached on the SCA’s compensation claim and the vessel is allowed to sail, the most likely destination to discharge its 10,000 plus containers is Port Said. Then the ship can proceed to a dry-dock for repairs, said to be “relatively minor but necessary”.

Shippers will need to satisfy the average adjuster, Richards Hogg Lindley, with the production of the relevant documentation along with an Average Bond Form and Average Guarantee Form. Then, shippers granted a GA release after security has been provided will probably be required to pay again to relay their cargo to the final destination port.

In the case of the 15,282 teu Maersk Honam GA in 2018, MSC requested $1,250 per 40ft container from shippers to cover on-carriage.

Apart from the official GA declaration, shippers with cargo onboard the Ever Given complain they have had “little if any information” from Evergreen or its Ocean Alliance vessel sharing partners, CMA CGM and Cosco/OOCL, on the current status of their cargo.

“Surely they have a duty of care to their customers and can’t just wash their hands of the cargo just because General Average has been declared,” said one UK-based shipper.