6 ms·

You can get a rough idea by thinking of this as if it were a natural disaster, and from that perspective I think the toll is probably not too bad. No casualtie

by lisper 6y ago

You can get a rough idea by thinking of this as if it were a natural disaster, and from that perspective I think the toll is probably not too bad. No casualties, very little property damage, and a week is not really all that long. However... that is no excuse to shrug this off. We were very, very lucky that it was only a week. The ship could easily have broken in two, which would have been a catastrophe of the first order and likely shut the canal down for a year. The world dodged a major bullet here.

nowandlater 6y ago
That's no joke. Salvage operations is such a fascinating topic, which I'm sure many (me included) found themselves quickly obsessed with. The sagging and hogging threshold of this ship is the critical key here. I'm curious how close/or not the hull came to being compromised.
- Animats 6y ago
  That's why Smit has naval architects on staff, and the program Hecsalv.[1] They will have calculated the limits of how much the stern could be pushed without damaging the bow before pushing it. [1] https://www.herbert-abs.com/hecsalv https://www.herbert-abs.com/hecsalv
iso1210 6y ago
The canal revenues were down about $15m/day. If it really cost $7b a day, then Egypt is massively undercharging.
- Taek 6y ago
  Not necessarily. I pay only $1 a day for water, but if you stop giving me water for 7 days the damages are going to be a lot more than $7. That doesn't mean it's reasonable to charge me more than $1 per day for water. Obviously an extreme example, but the situation with this ship is likely similar. The damages probably far exceed the $15m/day in revenue (though I suspect they are far lower than $7b per day).
  - Sohcahtoa82 6y ago
    > That doesn't mean it's reasonable to charge me more than $1 per day for water. This is where someone steps in and says something to the tune of "Whatever price you're willing to pay is by definition reasonable" and completely ignore the ethical/moral issues with essentially holding someone's life for ransom by charging the maximum price they can get for something they need to survive.
    - ksdale 6y ago
      Looks like you stepped in to say it!
  - OscarCunningham 6y ago
    The reason water is cheap is because it's plentiful; there's a lot of competition to supply it. But there's only one Suez canal and sailing around Africa is much worse. So you would expect Egypt to be extracting a significant portion of the value the Suez canal adds.
    - wizzwizz4 6y ago
      So… if somebody gets a monopoly on the water supply to an area, you think a price hike is reasonable? Oh, wait, water's already a monopoly: https://en.wikipedia.org/wiki/Natural_monopoly https://en.wikipedia.org/wiki/Natural_monopoly
      - lizknope 6y ago
        The houses just 100 yards away from me have wells for water. There is a large upfront cost of making the well but after that you have "free" water other than the electricity for the pump.
        fest 6y ago
        In some countries (Latvia being the example I'm familiar with), water from artesian wells is considered a limited resource and it's taxed.
- iudqnolq 6y ago
  Ha! I never thought I'd see a patio-style charge more to a govt. Only on hn...
- plaidfuji 6y ago
  Depends.. their fees are likely based on the saved time/cost of circling Africa, and calculated so as not to encourage other nations to construct workarounds themselves (if that’s even geographically feasible).. not on the cost of their service being down once people are already committed to it.
- throwaway1777 6y ago
  Pretty sure there are literal treaties in place. It’s not simple supply and demand.
- creato 6y ago
  Someone else in one of these canal threads said that Egypt charges slightly less than it would cost to sail around Africa. If that's true, that Egypt is probably capturing around as much value as is possible from the canal.
  - CalChris 6y ago
    Quite a bit less. https://www.youtube.com/watch?v=0iwOZOb90fM https://www.youtube.com/watch?v=0iwOZOb90fM
    - creato 6y ago
      That example was pretty idealized, starting and ending very close to the canal. Most voyages are probably not affected quite as starkly by the canal, and I doubt the canal can or does charge ships based on their overall itinerary.
      - pitaa 6y ago
        > I doubt the canal can or does charge ships based on their overall itinerary You'd be wrong there! They actually have a rebate system[0] based on a number of factors including origin and destination. Basically, they try to make it so that its always cheaper to go through the canal, rather than sail around. [0] https://www.wilhelmsen.com/ships-agency/suez-canal/suez-canal-rebates-guide/ https://www.wilhelmsen.com/ships-agency/suez-canal/suez-cana...
- tehjoker 6y ago
  The suez is the site of massive imperial intervention. The Suez crisis was precipitated when Egypt nationalized the canal. Western militaries and economic leverage are deployed to keep the prices low for the benefit of those governments. It's a huge mistake to regard any international trade in the middle east as regulated by simple supply and demand curves. This is a site of world geostrategic focus, usually at the expense of the people that live there.
  - azernik 6y ago
    It's not 100% negative - clever Egyptian governments have managed to charge an extra "price" in diplomatic and geopolitical advantage. e.g. using selective closures as a weapon, selective opening to military traffic as an incentive. You just have to be careful not to take actions that affects everyone, like a massive and "unreasonable" price hike; these invite the kind of great-power consensus against you that is very dangerous. (Interestingly, both have been practiced towards Israel at different times, as the countries have gone from bitter enemies to cautiously aligned against both Iran and Sunni Islamism of the Brotherhood/Hamas flavor.)
- Spooky23 6y ago
  I doubt it. It’s a significant source of revenue for a country with limited revenue sources. End of the day, the big shippers can price in the two week delay to round Africa, and higher tolls could make a competing railway feasible. As it is China will probably have built a rail corridor in a few decades.
- rswail 6y ago
  The cost to traverse the canal is likely to be as close as possible to the cost of the alternative routes (eg Cape of Good Hope) that Egypt can make them, while still providing the advantages of saved time and operational cost. The cost here was for the interruption to the schedules, not the daily cost of operations normally.
DVk6dqsfyx5i3ii 6y ago
After Egypt intentionally blocked the Suez Canal during the Six Day War and an operation was taken to reopen it after the Yom Kippur War it took around 7 months to clear the ships that were scuttled to block it[1]. I would think a cleanup with more modern technology dealing with a ship that wasn't scuttled for the purpose of blockage would take less time. [1] https://en.wikipedia.org/wiki/1974_Suez_Canal_Clearance_Operation#Operation_Nimrod_Spar https://en.wikipedia.org/wiki/1974_Suez_Canal_Clearance_Oper...
- lisper 6y ago
  The 1974 operation involved ten ships, the largest of which was 6700 tons. The Ever Given displaces 220,000 tons. It's an entirely different beast.
  - pixl97 6y ago
    While our ships have grown greatly, so has our ability to salvage them at the same time.
    - Animats 6y ago
      Worldwide salvage capacity isn't up much. Mammoet Salvage and Titan Salvage exited the business a few years ago. Smit is one of the few salvors with worldwide reach and their own heavy equipment. The business requires huge equipment on standby, and trained people waiting for the next crisis. Smit is now part of Boskalis, which is a big marine engineering firm. They have dredgers, heavy lift ships, tugs, and barges, which are useful both for marine construction and for salvage. So the fleet can do other things between crises.
    - Uehreka 6y ago
      That feels like the kind of non-obvious claim that should come with a source (even just a blog post by an analyst that lays out the relevant vocab terms and the general theory).
  - fiedzia 6y ago
    Its large, but its size is limited by sues canal. Ships could be much larger if they were designed for a different route.
andi999 6y ago
There is no major bullet here. Nowadays the alternative route around Africa takes 10 days only.
- lisper 6y ago
  10 days is not a big deal if it's just one shipment. It's a huge deal if it affects every ship that would otherwise have gone through the canal, i.e. 50 ships a day, 18,000+ ships a year. That's 180,000 extra ship-days per year. That's a pretty major bullet in an economy built on just-in-time inventory control.
  - bkor 6y ago
    Aside from the additional ships, you need additional containers, employees, etc. It also costs more in bunkers, etc. For JIT it wouldn't matter too much though. As long as it arrives on schedule it would be ok.

by lisper 6y ago

nowandlater 6y ago

That's no joke. Salvage operations is such a fascinating topic, which I'm sure many (me included) found themselves quickly obsessed with. The sagging and hogging threshold of this ship is the critical key here. I'm curious how close/or not the hull came to being compromised.

Animats 6y ago
That's why Smit has naval architects on staff, and the program Hecsalv.[1] They will have calculated the limits of how much the stern could be pushed without damaging the bow before pushing it. [1] https://www.herbert-abs.com/hecsalv https://www.herbert-abs.com/hecsalv

iso1210 6y ago

The canal revenues were down about $15m/day. If it really cost $7b a day, then Egypt is massively undercharging.

Taek 6y ago
Not necessarily. I pay only $1 a day for water, but if you stop giving me water for 7 days the damages are going to be a lot more than $7. That doesn't mean it's reasonable to charge me more than $1 per day for water. Obviously an extreme example, but the situation with this ship is likely similar. The damages probably far exceed the $15m/day in revenue (though I suspect they are far lower than $7b per day).
- Sohcahtoa82 6y ago
  > That doesn't mean it's reasonable to charge me more than $1 per day for water. This is where someone steps in and says something to the tune of "Whatever price you're willing to pay is by definition reasonable" and completely ignore the ethical/moral issues with essentially holding someone's life for ransom by charging the maximum price they can get for something they need to survive.
  - ksdale 6y ago
    Looks like you stepped in to say it!
- OscarCunningham 6y ago
  The reason water is cheap is because it's plentiful; there's a lot of competition to supply it. But there's only one Suez canal and sailing around Africa is much worse. So you would expect Egypt to be extracting a significant portion of the value the Suez canal adds.
  - wizzwizz4 6y ago
    So… if somebody gets a monopoly on the water supply to an area, you think a price hike is reasonable? Oh, wait, water's already a monopoly: https://en.wikipedia.org/wiki/Natural_monopoly https://en.wikipedia.org/wiki/Natural_monopoly
    - lizknope 6y ago
      The houses just 100 yards away from me have wells for water. There is a large upfront cost of making the well but after that you have "free" water other than the electricity for the pump.
      - fest 6y ago
        In some countries (Latvia being the example I'm familiar with), water from artesian wells is considered a limited resource and it's taxed.
iudqnolq 6y ago
Ha! I never thought I'd see a patio-style charge more to a govt. Only on hn...
plaidfuji 6y ago
Depends.. their fees are likely based on the saved time/cost of circling Africa, and calculated so as not to encourage other nations to construct workarounds themselves (if that’s even geographically feasible).. not on the cost of their service being down once people are already committed to it.
throwaway1777 6y ago
Pretty sure there are literal treaties in place. It’s not simple supply and demand.
creato 6y ago
Someone else in one of these canal threads said that Egypt charges slightly less than it would cost to sail around Africa. If that's true, that Egypt is probably capturing around as much value as is possible from the canal.
- CalChris 6y ago
  Quite a bit less. https://www.youtube.com/watch?v=0iwOZOb90fM https://www.youtube.com/watch?v=0iwOZOb90fM
  - creato 6y ago
    That example was pretty idealized, starting and ending very close to the canal. Most voyages are probably not affected quite as starkly by the canal, and I doubt the canal can or does charge ships based on their overall itinerary.
    - pitaa 6y ago
      > I doubt the canal can or does charge ships based on their overall itinerary You'd be wrong there! They actually have a rebate system[0] based on a number of factors including origin and destination. Basically, they try to make it so that its always cheaper to go through the canal, rather than sail around. [0] https://www.wilhelmsen.com/ships-agency/suez-canal/suez-canal-rebates-guide/ https://www.wilhelmsen.com/ships-agency/suez-canal/suez-cana...
tehjoker 6y ago
The suez is the site of massive imperial intervention. The Suez crisis was precipitated when Egypt nationalized the canal. Western militaries and economic leverage are deployed to keep the prices low for the benefit of those governments. It's a huge mistake to regard any international trade in the middle east as regulated by simple supply and demand curves. This is a site of world geostrategic focus, usually at the expense of the people that live there.
- azernik 6y ago
  It's not 100% negative - clever Egyptian governments have managed to charge an extra "price" in diplomatic and geopolitical advantage. e.g. using selective closures as a weapon, selective opening to military traffic as an incentive. You just have to be careful not to take actions that affects everyone, like a massive and "unreasonable" price hike; these invite the kind of great-power consensus against you that is very dangerous. (Interestingly, both have been practiced towards Israel at different times, as the countries have gone from bitter enemies to cautiously aligned against both Iran and Sunni Islamism of the Brotherhood/Hamas flavor.)
Spooky23 6y ago
I doubt it. It’s a significant source of revenue for a country with limited revenue sources. End of the day, the big shippers can price in the two week delay to round Africa, and higher tolls could make a competing railway feasible. As it is China will probably have built a rail corridor in a few decades.
rswail 6y ago
The cost to traverse the canal is likely to be as close as possible to the cost of the alternative routes (eg Cape of Good Hope) that Egypt can make them, while still providing the advantages of saved time and operational cost. The cost here was for the interruption to the schedules, not the daily cost of operations normally.

DVk6dqsfyx5i3ii 6y ago

After Egypt intentionally blocked the Suez Canal during the Six Day War and an operation was taken to reopen it after the Yom Kippur War it took around 7 months to clear the ships that were scuttled to block it[1]. I would think a cleanup with more modern technology dealing with a ship that wasn't scuttled for the purpose of blockage would take less time. [1] https://en.wikipedia.org/wiki/1974_Suez_Canal_Clearance_Operation#Operation_Nimrod_Spar https://en.wikipedia.org/wiki/1974_Suez_Canal_Clearance_Oper...

lisper 6y ago
The 1974 operation involved ten ships, the largest of which was 6700 tons. The Ever Given displaces 220,000 tons. It's an entirely different beast.
- pixl97 6y ago
  While our ships have grown greatly, so has our ability to salvage them at the same time.
  - Animats 6y ago
    Worldwide salvage capacity isn't up much. Mammoet Salvage and Titan Salvage exited the business a few years ago. Smit is one of the few salvors with worldwide reach and their own heavy equipment. The business requires huge equipment on standby, and trained people waiting for the next crisis. Smit is now part of Boskalis, which is a big marine engineering firm. They have dredgers, heavy lift ships, tugs, and barges, which are useful both for marine construction and for salvage. So the fleet can do other things between crises.
  - Uehreka 6y ago
    That feels like the kind of non-obvious claim that should come with a source (even just a blog post by an analyst that lays out the relevant vocab terms and the general theory).
- fiedzia 6y ago
  Its large, but its size is limited by sues canal. Ships could be much larger if they were designed for a different route.

andi999 6y ago

There is no major bullet here. Nowadays the alternative route around Africa takes 10 days only.

lisper 6y ago
10 days is not a big deal if it's just one shipment. It's a huge deal if it affects every ship that would otherwise have gone through the canal, i.e. 50 ships a day, 18,000+ ships a year. That's 180,000 extra ship-days per year. That's a pretty major bullet in an economy built on just-in-time inventory control.
- bkor 6y ago
  Aside from the additional ships, you need additional containers, employees, etc. It also costs more in bunkers, etc. For JIT it wouldn't matter too much though. As long as it arrives on schedule it would be ok.