“Global Maritime:
Is the Suez Canal Safe for Shipping?”
Andrew Varney
Managing Director
Current Situation
• General report – business as usual
• Political and security situation remains
extremely fluid
• Convoy...
Specifics of the Security Situation
• Violent clashes since July 2013
• Escalation in hostilities triggered by the
overthr...
N
Port Said
Al Qantara
Sinai Peninsula
Suez Canal
•
31st August 2013 – reports that a Merchant Vessel was attacked al...
Attack on the Cosco Asia
RPG Strike on the Cosco Asia
Global Maritime: Is the Suez Canal Safe for Shipping?
• RPG attac...
Attack on the Cosco Asia
• The canal is the second most important chokepoint for oil and
LNG heading to Europe and North A...
Implications for the Suez Canal
• The unthinkable has happened twice before:
– 1956-1957 following a bungled armed interve...
Effect on Maritime Contracts
• Central concern is the shipping and charter party contracts –
would a closure of the canal ...
Other implications
• The question is the degree of risk in proceeding to a port or
along the Suez
• The attack on the Cosc...
Discussion Points
Global Maritime: Is the Suez Canal Safe for Shipping?
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Port2Port Maritime - "Is the Suez Canal Safe for Shipping?" Global maritime threats

For years security along the Suez Canal was largely a non-issue. But since the military overthrow of the Morsi government in Egypt in June, the situation has changed. A jihadist uprising has led to attacks on military outposts and on commercial shipping as seen most dramatically in the Aug. 31 rocket-propelled grenade attack on the container ship Cosco Asia as it passed through the canal, captured in a widely viewed video. Given that some 15 to 20 percent of global container trade passes through the Suez Canal, according to Drewry, with 3,300 container ship transits in 2012, concern about possible disruption is growing among container lines and their customers whose supply chains require uninterrupted operation of the 120-mile-long waterway. In this webcast, experts in security and political risk assessed the current situation and the potential for further violence and possible disruption in 2014. http://goo.gl/GIpcYp
Published on: Mar 4, 2016
Published in: Economy & Finance      Business      Technology      
Source: www.slideshare.net


Transcripts - Port2Port Maritime - "Is the Suez Canal Safe for Shipping?" Global maritime threats

  • 1. “Global Maritime: Is the Suez Canal Safe for Shipping?” Andrew Varney Managing Director
  • 2. Current Situation • General report – business as usual • Political and security situation remains extremely fluid • Convoys have continued uninterrupted • Though traffic remains normal – political violence has spread to canal cities of Port Said, Ismailia and Suez. • Egyptian military has provided additional security Global Maritime: Is the Suez Canal Safe for Shipping?
  • 3. Specifics of the Security Situation • Violent clashes since July 2013 • Escalation in hostilities triggered by the overthrow of Morsi has spread • Bombings and shootings have spread from the Sinai to Cairo, the Nile Delta & Suez Canal • Attack on the Cosco Asia highlighted the credibility of the threat Global Maritime: Is the Suez Canal Safe for Shipping?
  • 4. N Port Said Al Qantara Sinai Peninsula Suez Canal • 31st August 2013 – reports that a Merchant Vessel was attacked along the Suez Canal • 2 x RPG’s fired at the COSCO ASIA as it travelled northbound on the Suez Canal • Early reports – shipping authorities (SCA) denied the attack • COSCO ASIA confirmed the incident
  • 5. Attack on the Cosco Asia RPG Strike on the Cosco Asia Global Maritime: Is the Suez Canal Safe for Shipping? • RPG attack was reported to have done little or no damage • 1 x RPG hit a strut holding the containers • 1 x RPG holed the ship in the ballast tanks – although ships of this size are built to withstand such incident – potential for disastrous result evident …..
  • 6. Attack on the Cosco Asia • The canal is the second most important chokepoint for oil and LNG heading to Europe and North America after the Strait of Hormuz Traffic Statistics by Ship Type (Jan – Mar 2013) 1600 1479 1400 1200 1000 821 800 650 600 400 314 257 152 200 66 174 16 0 Oil Tankers LNG Bulk Carriers General Cargo Container Ships Ro/Ro Source: Suez Canal Authority Global Maritime: Is the Suez Canal Safe for Shipping? Car Carriers Passenger Ships Others
  • 7. Implications for the Suez Canal • The unthinkable has happened twice before: – 1956-1957 following a bungled armed intervention by Britain, France and Israel when the canal was nationalised – 1967-1975 after the Six Day War between the Arab states and Israel. • Such drastic measure (closure of the canal) is unlikely at present • Less drastic scenarios are more plausible: – Situation on the ground is volatile – Heightened civil commotions along the Suez Canal – Civil war less conceivable – greater threat than canal closure Global Maritime: Is the Suez Canal Safe for Shipping?
  • 8. Effect on Maritime Contracts • Central concern is the shipping and charter party contracts – would a closure of the canal render the contracts void • US and UK courts have routinely held that where vessels were not trapped (alternate route sought ) the charter party is not frustrated and the ship owner is required to perform the contract • Suez Canal closure in 1956 was not held sufficient reason to frustrate a charter party for vessels that re-routed Global Maritime: Is the Suez Canal Safe for Shipping?
  • 9. Other implications • The question is the degree of risk in proceeding to a port or along the Suez • The attack on the Cosco Asia is not sufficient (statistically) to pose a severe risk • If vessels are regularly targeted/serious security concerns along the canal - possible that a charterer’s order is rejected • Owners and charterers need to review clauses that allocate risk for a canal closure Global Maritime: Is the Suez Canal Safe for Shipping?
  • 10. Discussion Points Global Maritime: Is the Suez Canal Safe for Shipping?

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