Evergreen Gets Partially Freed From Suez Canal
March 26 - 2021 Coffee Geography Magazine
Egypt’s
Suez Canal Authority confirmed earlier on Monday that the stranded vessel was
successfully refloated in the canal. The ship sailed toward The Bitter Lakes
for inspection. Evergreen thanked the Suez Canal Authority and other concerned
parties on Monday, for managing to successfully release its mammoth Ever Given
ship that had blocked the Suez Canal since Tuesday.
Commodities like Coffee were affected along with crude oil and LNG as vessels were blocked from passing the maritime chokepoint at Suez Canal. The impact was felt primarily in Europe where robusta coffee from Vietnam is shipped through to major international roasters like Nescafe. The disruption is expected to hurt the global logistic network as delays exacerbate the shortage of containers at all major maritime ports.
“We
are most grateful to the Suez Canal Authority and all the concerned parties for
their assistance and support through this difficult and unfortunate situation,”
Evergreen Line said in a statement.
Egyptian
presidential advisor Mohab Mamish said Monday that working hours at the Suez
Canal Authority (SCA) will be doubled to allow awaiting ships to cross the
canal.
Mamish,
aid for SCA and marine port projects, told Extra News channel that Ever Given
will be fully examined to make sure it is sound and able to navigate its way.
All
the while, Mamish said, the SCA will make way for other ships to cross.
The
European Union and Arab states congratulated Egypt on Monday.
Egyptian
authorities announced on Monday officially restoring navigation at the Canal
after releasing the ship.
“Mabrouk
(congratulations) to Egypt and the world for the successful floating of the
container ship that blocked the Suez Canal,” EU Ambassador to Egypt Christian
Berger.
“Impressive
work by all involved,” the EU added.
Saudi
Arabia and Oman also extended their congratulations to Egypt as the world has
been watching Egypt’s efforts to end the crisis step by step.
"The
great efforts made by the government and people of Egypt silenced doubts about
the ability to end the crisis at this record time," Omani Ambassador to
Egypt Abdullah bin Nasser wrote on Twitter.
Saudi
Arabia, for its part, hailed the Egyptian efficiency and dedication to restore
international maritime traffic to normal.
A
Saudi statement also expressed appreciation of the Egyptian leadership under
President Abdel Fattah El-Sisi for its efforts in dealing with the incident.
The
Suez Canal's service provider Leth Agencies said 43 vessels had resumed their
trips from the Great Bitter Lake southwards towards the Red Sea, after the
Panamian Ever Given ship was freed.
There
are more than 400 vessels awaiting entry thus far, including oil tankers as the
ship had diagonally blocked the canal.
Vessels hauling estimated $10 billion worth of goods at
the Egyptian waterway were unable to deliver their scheduled daily distance due
to the incident. The giant Japanese cargo ship blocked the waterway for the
last few days with unsuccessful attempt to remove it on Thursday. Maritime
experts are saying freeing the 200,000 ton vessel took days and the
logjam at the canal has significantly increased waiting for any immediate solution.
Earlier Report:
About 12% of global trade passes through the canal, which
connects the Mediterranean Sea to the Red Sea and provides the shortest sea
link between Asia and Europe.
“For traders, they are going to scramble to supply their
clients in Europe,” said Jan Luhmann, founder of JL Coffee Consulting and a
former head coffee buyer at Jacobs Douwe Egberts BV, one of the world’s largest coffee
roasters. “Resolving this is going to take a few days if we are lucky, but even
so, a lot of damage has already been done.”
Only two major robusta coffee producers Brazil and Ivory
Coast don’t use this key route to reach
major consumers in Europe. Coffee roasters in the continent had already been
struggling to get coffee from Vietnam, the world’s largest robusta producer,
due to a shortage of shipping containers. All of the beans Europe imports from Ethiopia,
Uganda, Vietnam and Indonesia flow through the Suez.
“Can roasters support two to three weeks of delays? Probably
not,” said Raphaelle Hemmerlin, head of logistics at Swiss coffee trader
Sucafina SA. “I don’t think they have the buffer stock that they normally
have.”
Unlike roasters in the U.S., Europe’s coffee makers can’t as
easily use supplies of robusta coffee from Brazil due to the taste of their
products. As a result, some roasters in the continent recently turned to
supplies from East Africa to bridge the shortfall of robusta beans from
Vietnam, buying up supplies from places like Uganda or the milder-tasting
arabica beans from the region.
Traders who have them stored in European warehouses are
charging a hefty premium in the physical market. At the peak of the container
squeeze, traders were demanding $450 a metric ton above the exchange price for
Vietnamese coffee held in Europe, three times the normal rate.
Brazil has so far benefited from price dislocations caused
by the container shortage that first hit Vietnam at the end of last year. The
No. 2 robusta producer exported a record 4.9 million bags of the coffee in
2020, a 24% increase from a year earlier, according to industry group Cecafe.
Still, most of those beans ended up in exchange-certified stockpiles instead of with roasters. That’s because replacing Vietnamese coffee with Brazilian beans would change the taste of the final product for consumers. East African beans are a better replacement. Container lines A.P. Moller-Maersk A/S and Hapag-Lloyd AG said they are considering sending ships around Africa to avoid the Suez gridlock, while Torm A/S, a Danish owner of tankers, said its clients have asked about the cost of options to divert. Even if that happens, it would still take time to clear a queue of vessels.
“If this lasts another day or two, that will mean about a
week of delay, so there won’t be much of an impact,” Hemmerlin said. “Beyond
that, with the freight issues we already have out of Asia, freight prices will
increase further.”
“For me, it’s just adding more problems to the whole supply
chain,” she said.