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The Inside Story of the Ship That Broke Global Trade - YouTube
Channel: Bloomberg Quicktake: Originals
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Getting to Egypt, by the way,
[1]
was the most hassle I've
ever had on a reporting trip.
[6]
It was the fact that
when I arrived in Egypt,
[7]
absolutely no one wanted to talk to me.
[8]
By going to the Suez Canal,
[10]
I visited the Suez Canal control tower
[13]
and seeing for myself how things worked.
[15]
It was only by going to the
litigation in the court,
[17]
in Ismailia, and hearing the lawyers
[20]
talk about the problems on the bridge,
[22]
that we learned all this new information.
[24]
A giant container ship
[26]
is blocking the Suez Canal.
[27]
One of the world's busiest waterways,
[29]
the route is vital for
the movement of everything
[31]
from oil to consumer goods.
[33]
Initially people blamed
strong winds, but you know,
[37]
it was never a very
satisfactory explanation,
[39]
simply because strong winds
in that part of the world
[41]
happened for about half the year.
[43]
Bad weather may not be the main reason
[45]
why the ship got stuck.
[49]
It could have been a
technical or a human error.
[51]
That will be revealed
through the investigation.
[53]
According to evidence that was presented
[55]
in an Egyptian court, the pilots
at one point were arguing,
[58]
shouting at each other, trading insults.
[60]
So if this lasts for
anything more than a day,
[64]
it could cause major headaches
[67]
for global shipping and energy markets.
[70]
Why did this situation even
occur in the first place?
[73]
This ship is so huge.
[75]
It's as long as the Empire
State Building is tall.
[78]
And it is blocking the entire
width of the Suez Canal
[80]
since it ran aground on Tuesday.
[82]
I think most of us aren't aware of just
[85]
how much global trade hangs by a thread.
[94]
Hi, my name's Kit
[96]
and I'm a reporter for Bloomberg.
[98]
I thought it was critical to actually
[100]
go to Egypt to report this story.
[102]
I visited the Suez Canal Authority,
[103]
I spoke to the chief pilots.
[105]
I attended a couple of the court hearings
[108]
and saw the ship owners
lawyers make the argument
[110]
for the first time that
there had been some fault
[113]
in the hands of the Suez Canal pilots.
[116]
I'm Matthew Campbell.
[117]
I am a reporter and editor
for Bloomberg Businessweek.
[121]
So modern ships of all sizes really,
[124]
have something called a voyage
data recorder on the bridge.
[127]
The idea is to capture audio
of everything that goes on.
[131]
So in the case of the Ever Given,
[133]
as in so many marine accidents,
[135]
the evidence from the VDR
became really critical
[139]
to determining what actually occurred.
[141]
The urgent effort to dislodge a cargo ship
[143]
stuck in the Suez Canal,
[145]
blocking a key global trading route.
[147]
This is a traffic jam like no other.
[150]
There was this rippling
cascade of disruption
[153]
to global trade, and therefore
lots and lots of people
[156]
who might argue that they lost money
[159]
as a result of what occurred on board
[160]
the Ever Given in late March.
[162]
Then, the happenings on the bridge,
[165]
what was recorded by the VDR,
[167]
becomes a matter of incredible sensitivity
[169]
because it is just crucial evidence.
[178]
Ships have, with some exceptions,
[181]
just gotten bigger and bigger
over the last 30 or 40 years.
[185]
The Ever Given, if you
include the value of the ship,
[188]
the value of the fuel on board,
[190]
and the 17,000 odd
containers it was carrying,
[193]
it comes to about a billion dollars.
[195]
This is one of the largest objects
[197]
that humans have ever put on the ocean.
[199]
There was a crew of 25 led by a captain
[203]
named Krishnan Kanthavel,
[204]
a very experienced
mariner from Tamil Nadu.
[209]
It had set sail from Asia,
[212]
and was due to arrive in
Rotterdam a couple of weeks later.
[218]
In the Suez Canal,
[219]
you typically transit
early in the morning.
[222]
So the Ever Given would've
been emerging from the Red Sea,
[226]
coming into the Suez Canal.
[228]
There were terrible winds at that point,
[232]
a whipping sand, a really severe storm.
[235]
And enough wind, in
fact, that some vessels
[237]
decided that they did not want to proceed
[239]
through the canal on that day.
[242]
The captain of the Ever
Given, Captain Kanthavel,
[244]
would have had a choice
about whether to proceed.
[246]
It is always the final
decision of the captain.
[249]
But there are huge financial pressures
[251]
on a captain in this situation.
[253]
The shipping industry is
a just in time business.
[256]
A captain of his experience
would be keenly aware
[260]
that there were huge
amounts of money riding on
[262]
getting his cargo to Europe on time.
[266]
If you look at the Suez
Canal from a satellite,
[269]
it looks like a fairly straight
shot through the desert,
[271]
with a couple of lakes on the way.
[272]
And you would imagine, I
imagined, that it wouldn't be
[275]
particularly difficult to steer a ship
[277]
straight through the passage.
[279]
But actually, it's a very
stressful thing to do,
[282]
we're told by all all the sailors
[284]
and captains that we spoke to.
[285]
It's a very narrow gap in places,
[287]
200 meters or so wide, and quite shallow.
[290]
So any mistake is liable to
cause an incident of some kind.
[295]
So when big ships come
into narrow waterways,
[299]
typically they will take on
board at least one pilot.
[302]
And a pilot is someone who
really intimately knows
[306]
a particular area and
can advise the captain
[309]
and the helmsmen of a ship
who may not be familiar with
[312]
that waterway on what to
avoid, dangerous currents,
[316]
submerged hazards, that kind of thing.
[318]
They don't actually steer the ship,
[320]
but they give instructions as to
[321]
the best way to get through.
[322]
They have to communicate with the captain
[324]
and the other crew on the
bridge of the Ever Given,
[326]
which is a difficult conversation to have
[329]
because the captain and the
crew are mostly using English.
[333]
The Egyptian pilots would mostly
[335]
have been speaking in Arabic.
[336]
So it would have been
quite difficult for them
[337]
to have a proper conversation.
[342]
We were told by almost
everyone we interviewed
[345]
that the dynamic between
the captain and the crew,
[349]
and the local Egyptian officials,
[351]
can be a tense one when
they're going through Suez.
[354]
And there's a few reasons for that.
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The captain is the master of his ship.
[357]
In normal circumstances he has
[359]
complete control over the crew.
[362]
He's the boss.
[362]
But when you go through Suez,
[364]
you have to surrender some of that control
[366]
to the local pilots whose job it is
[368]
to steer the vessel through the canal.
[370]
When you do speak to people
[371]
in the shipping industry,
[373]
you will quickly learn that Suez pilots
[375]
have a pretty mixed reputation.
[377]
We had lots of reports of pilots
[379]
asking for cigarettes, for example,
[381]
asking for other gifts in
return for their cooperation
[385]
in getting through the canal.
[386]
And all of these things add up to make it
[388]
quite a fraught situation.
[402]
So the Ever Given comes into the canal
[404]
in these very windy conditions,
[406]
and you have to think
about the scale here.
[408]
This is a vessel that is 400 meters long.
[412]
It's also, at the top of its containers,
[414]
more than 50 meters above the waterline.
[416]
So it really is an enormous surface
[418]
for the wind to smack against.
[421]
And what appears to have happened is
[423]
the Ever Given began to
act as a sort of sail
[426]
and was swerving back
and forth in the canal.
[429]
And we know from some of the evidence
[430]
that's come out in legal proceedings,
[433]
that there was an argument on the bridge
[435]
between the two Egyptian pilots.
[437]
They were arguing about
speed, the weather.
[440]
And we know that when the captain tried to
[442]
get in the middle of the
argument and calm things down,
[444]
one of the Egyptian pilots
threatened to leave the ship,
[447]
leave his post.
[449]
At some point,
[450]
as the vessel was swerving back and forth,
[453]
one of the pilots,
according to what we know
[455]
from the voyage data recorder,
[457]
gave the order to go full ahead.
[458]
And that would have taken
[459]
the Ever Given's speed to about 13 knots.
[462]
And speeding up is supposed
to give you more control.
[465]
It gives you more purchase on the rudder
[467]
when you're trying to steer
one of these enormous ships.
[470]
And in normal circumstances,
[471]
that would be a good
way to regain control.
[475]
But, the situation at that moment,
[477]
it was the worst thing they could've done
[479]
because the ship is in
such a narrow channel
[481]
that increasing the speed
actually, conversely,
[483]
can make it much harder to control
[485]
because of something called
Bernoulli's Principle.
[487]
And the basic idea is that
as water rushes faster,
[490]
or any fluid rushes faster,
the pressure decreases.
[494]
And because there's less pressure,
[496]
the vessel is sucked toward
one bank or the other.
[499]
That then became a problem as the captain,
[501]
and the helm, and the bridge crew,
[503]
fought to keep control of the vessel.
[506]
There were, according to what we know
[508]
from the voyage data recorder,
[509]
orders given in rapid
succession from the pilots
[512]
to go hard to port or hard to starboard.
[514]
So eventually one of these
turns went past the point
[518]
where it could be recovered,
[519]
and the bow of the Ever Given
lodged right into the sand.
[523]
The ship just slows down,
[524]
and then suddenly you
realize you've crashed.
[532]
So the Ever Given was stuck in one of
[534]
the southern reaches of the canal,
[536]
quite close to the southern entrance.
[538]
Now, the Suez has been
expanded over the years.
[541]
Most recently in 2015.
[543]
Critically, those
expansions have been aimed
[545]
at allowing two-way
traffic, for the most part.
[548]
Because, originally, the
canal was only wide enough
[552]
for vessels to go in
one direction at once.
[554]
However, where the Ever Given was stuck
[557]
was a one-way section, there
was no bypass around it.
[563]
Somehow when they crashed,
[564]
they managed to not only wedge
the front into the deserts,
[567]
but the back of the ship
also grounded as well.
[570]
So the ship was left diagonally wedged,
[572]
completely blocking the channel.
[573]
By the end of the first day,
[574]
there would've been a
hundred or so vessels
[576]
anchored waiting to transit.
[578]
And that number grew
steadily hour by hour.
[581]
Every day, goods worth $10 billion
[584]
were arriving at the canal
waiting to go through.
[589]
Look around you in any room
you happen to be in right now,
[592]
the vast majority of
the objects in that room
[595]
will have come to you on boats.
[597]
And if you live in Western Europe,
[598]
if you live in North America,
[600]
it is very likely that those boats
[602]
pass through the Suez Canal.
[603]
So every company that
deals with physical stuff
[607]
depends on this waterway
in one fashion or another.
[610]
So having it blocked is just
[611]
a titanically important problem.
[614]
And one that there were
billions of dollars
[616]
riding on resolving quickly.
[618]
The 400-meter long cargo
ship, the Ever Given,
[621]
is stuck in the Suez Canal.
[623]
And it is fouling up global trade.
[625]
50 ships a day normally
pass through the canal,
[628]
carrying 12% of the world's trade.
[630]
So the pressure is really
on to get her refloated.
[634]
The ship crashed at such
speed that the front
[637]
went six or seven meters
directly into quite rocky sand.
[641]
Two tug boats arrived very quickly.
[644]
They were just routine tug boats,
[646]
they weren't especially large or powerful.
[648]
But they immediately made
efforts to pull the ship free.
[651]
And it didn't move an inch.
[652]
It was clear it was firmly stuck.
[658]
The main entity with responsibility
for clearing the canal
[661]
and freeing the ship is
the Suez Canal Authority,
[663]
which is the Egyptian government entity
[666]
that controls the canal.
[668]
And the man in charge
of the pilots at least
[671]
is the chief pilot, Captain El-Sayed.
[673]
And he was one of the first on the scene.
[674]
And he, with his boss, chairman Rabie,
[677]
put together a plan to
try and get the ship free.
[680]
Initially they realized
that that simply pulling
[683]
probably wasn't going to be enough.
[684]
They would have to dig as well.
[686]
The front of the ship was
wedged so deep in the bank
[688]
that they would need to do some digging.
[690]
One of the earliest photos we have
[691]
is of a small yellow excavator,
[695]
right up against the front of the ship,
[697]
just scooping out scoop
after scoop of sand.
[700]
And you know, it looks ridiculous
[702]
next to the size of the
vessel, it looks hopeless.
[704]
This somewhat anonymous Egyptian guy
[709]
became a global internet celebrity
[711]
when photos of this went viral.
[713]
Just a kind of metaphor for
being stuck in a hopeless task.
[719]
The vessel's owners quite quickly hired
[721]
a Dutch firm called Smit, who are one of
[724]
the most prominent salvage
firms in the world.
[726]
So a team of experts from Smit flew in,
[729]
from the Netherlands and elsewhere,
[731]
and see if there was a way that
[733]
they could help get this ship off.
[735]
Salvage teams are awarded a percentage of
[737]
whatever they save, generally.
[739]
There are different ways to pay them,
[740]
but that's the traditional fashion.
[742]
Now, if you're a salvage
crew and you save a big,
[746]
fully-loaded oil tanker,
for example, from sinking,
[749]
you could be in line for
tens of millions of dollars.
[755]
So the team from Smit arrived
on the morning of March 25th.
[758]
So that's about two days
after the grounding.
[761]
The view of these
salvage experts from Smit
[764]
was that preparations needed
to be made immediately
[768]
to begin bringing containers
off, hiring a crane,
[771]
coming up with a plan
to offload these big,
[774]
very heavy boxes, in order
to lighten the vessel.
[777]
Now, there were some people
at the Suez Canal Authority,
[780]
is our understanding, who were
[783]
more reluctant to consider that option.
[785]
I think they worked out
it was gonna take months
[787]
to completely offload the
containers from the Ever Given.
[790]
So they were facing a much longer delay,
[792]
and a much longer blockage,
if they had to try
[795]
and take the containers off.
[796]
So the compromise that was arrived at
[798]
was towing would proceed
[800]
until the time that a crane arrived.
[803]
And then, if at that point,
the vessel was still stuck,
[806]
they would begin unloading it.
[808]
In a situation where every
day the canal is closed
[811]
costs the world economy
billions of dollars,
[813]
no one felt they had time to wait.
[818]
On the 28th of March, that was a Sunday,
[821]
you had two very powerful
tugs turn up from the south.
[826]
Combined had something like
[828]
200 or 300 tons of pulling power.
[832]
The tide is, of course, very important.
[834]
You want more water,
that means more buoyancy,
[837]
more ability to lift the ship
[839]
clear of whatever it's stuck on.
[841]
There was actually, at the
end of March, a supermoon,
[844]
a time when the moon is
unusually close to Earth.
[847]
Tidal peaks are higher.
[848]
So if you happen to be trying to get
[850]
a 400 meter container
ship off of a sandy bank,
[854]
that's potentially quite important
[855]
because you have more water to work with.
[858]
So everyone knew that
March 28th to March 29th
[861]
was the best opportunity
for weeks that the salvers
[864]
were going to have to
pull the Ever Given clear.
[867]
There was no sudden movement or noise.
[868]
They just suddenly realized their tugs,
[870]
instead of treading water, were moving,
[873]
and they were moving because the back had
[874]
very slowly started to
move away from the bank.
[877]
So the rear was freed first,
but the front was still wedged.
[882]
One of the worries was that
[884]
when the bow did finally come free,
[887]
it would swing clear across the canal.
[889]
First of all, potentially
doing terrible damage
[893]
to anyone who was in
the way, which included
[895]
lots of vessels from the
Suez Canal Authority,
[898]
and potentially also swinging right into
[901]
the opposite bank, grounding itself again.
[903]
So during the towing operations,
[906]
the crew of the Ever
Given had helped set up
[909]
cables from the bow of their
vessel to shore, four in total,
[913]
so that when the bow
did finally come clear,
[916]
it could be held from swinging
right across the canal.
[920]
Smit came up with an idea
to take on ballast water
[923]
into the ballast tanks of
the rear of the Ever Given.
[926]
The back is pushed down
[929]
and the front is lifted ever so slightly.
[931]
That slight lift of the
front turned out to be
[933]
just enough to help them
lift out of the sand.
[937]
So when the tide changed,
[939]
and the waters were flowing out,
[941]
and the two powerful tugs
[942]
were pulling in the same direction,
[943]
that was when the front
finally came clear.
[946]
And when that happened,
everything happened quite quickly.
[950]
There was jubilation, as you can imagine.
[955]
They all sounded their
horns at the same time,
[957]
it could be heard from miles away.
[958]
One of the Egyptian dredges was cheering
[961]
and shouting number one, number one.
[964]
So once the Ever Given was free,
[966]
it was towed up to the Great Bitter Lake,
[968]
which is a body of water
partway up the canal.
[971]
And it sat there during what became
[973]
a pretty tense legal standoff.
[976]
You had the Suez Canal Authority,
[978]
which is part of the Egyptian government,
[980]
demanding compensation
of more than $900 million
[984]
in exchange for letting the vessel go.
[987]
Now, the Egyptians
claimed that part of this
[990]
was a so-called salvage award,
[992]
which is the percentage of value
[994]
that you're entitled to
when you rescue a vessel.
[998]
Part was also for what amounted
to reputational damages.
[1001]
The owners of the Ever Given, and frankly,
[1004]
a lot of people observing
this around the world,
[1007]
thought that figure was absurd.
[1009]
The Egyptian government reduced
their ask to 550 million.
[1013]
I think it's probably a safe bet
[1014]
that the settlement came
in somewhat below that,
[1018]
but we just don't know.
[1019]
In any case, it is a great deal of money.
[1030]
One of the amazing things about shipping
[1032]
is that it's kind of
invisible to most of us.
[1035]
The ships have become too
big for ports in Manhattan,
[1038]
or in East London, so the
ports have moved elsewhere.
[1041]
So actually, shipping has
kind of receded from view.
[1044]
But in that time, it has
become an even more important
[1048]
part of our lives than ever before.
[1051]
Everything we depend on,
all the material goods,
[1053]
all the energy, all the
oil we put in our cars,
[1056]
everything we shop for at a
place like Ikea or Walmart,
[1059]
it all comes on ships.
[1061]
For about a week, the whole
world was riveted by shipping,
[1064]
and also understood in some
ways how fragile it is.
[1068]
And all it took was one
wrong turn, effectively,
[1071]
for that to all be shut down.
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