Evergreen Gets Partially Freed From Suez Canal

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.

evergreen blockage

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.

evergreen stuck

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.

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