Maersk Sues Evergreen Over That Suez Canal Incident

(Photo Credit: Alpsdake/Wikimedia Commons)
(Photo Credit: Alpsdake/Wikimedia Commons)

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Two years later, the Suez Canal drama is still unfolding the way it did back then — very, very slowly.

Danish shipping giant Maersk filed a lawsuit against fellow titan Evergreen over the Ever Given, the 1,300-ft cargo ship that got wedged in the Suez Canal for six days in March 2021. A Maersk spokesperson confirmed to The Daily Upside the company is suing Evergreen over the losses it incurred while the canal was blocked.

Prosecutey McSueface

As a refresher, the big boat became a one-boat supply-chain wrecking crew and held up an estimated $9.6 billion in marine traffic every day it was stuck. There were 400 vessels behind it by the time it was finally refloated by some heroic tugboats. ShippingWatch reported 50 of those ships belonged to Maersk (although it did not cite its sources) and said the company is seeking around $45 million in damages. Maersk’s spokesperson would not comment on the amount it wants in damages when contacted by The Daily Upside.

Evergreen’s retort is that Maersk has got the wrong guy, as it was merely leasing the Ever Given. That may seem incongruous given the boat had the word “Evergreen” emblazoned in giant letters down its side, but the complex dynamics of international shipping do muddy the waters. There was already some confusion over who exactly would pay a $916 million fine demanded by the Suez Canal Authority; the ship’s Japanese owners, its German management company, or Evergreen. The owners eventually struck an undisclosed compensation deal with the SCA.

Fittingly, Maersk’s case will likely take a very long time to play out, but nonetheless it could set an uncomfortable precedent for Evergreen at a particularly sensitive moment for the shipping industry as a whole:

  • While Maersk made a record-breaking $31 billion profit last year, it predicted this year that figure could sink to as little as $2 billion. Maersk’s CEO blamed the unsnarled global supply chain, as retailers who over-ordered in the face of pandemic-era shipping congestion are now spending less.
  • At the end of last year, Evergreen handed out an average annual bonus worth 50 times one month’s salary. Meanwhile, Barclays predicted Monday that shipping rates could well dip below pre-pandemic levels.

The Perfect Storm: In two weeks’ time shipping industry professionals will head to Long Beach, California, for the TPM23 conference (cue some awkward networking brunches for Evergreen and Maersk execs). As if macroeconomics and geopolitics weren’t enough to put attendees on edge, there’s also anxiety over fraying labor relations with West Coast port workers. “We’re in the calm before the storm,” one supply-chain risk assessment firm CEO told Bloomberg. If the shipping companies notice port workers singing “Leave Her, Johnny,” they’ll know the storm’s upon them.