21.4.2021 | Tax

Ever Given Lessons

Stephanie Hammond, director at Beatons Group, explores the ripple effect and impact of the logistics sector’s biggest mishap. 

Drama of Ever Given shows how challenging the logistics sector can be.

The unprecedented six-day shutdown of the Suez Canal and the subsequent impoundment of The Ever Given shows the enormous challenges the logistics sector faces every day.

The Ever Given became lodged diagonally in the globally important waterway on March 23, blocking the canal completely and halting billions in maritime commerce and trade.

Here, Stephanie Hammond, Director at Beatons group, explores the difficulties the industry overcomes on a daily basis and how one mishap can end up costing billions.

A knife-edge

Aerial photographs of the Ever Given showed how important the thin stretch of water between the Mediterranean and the Red Sea is to the world.

To think that just one ship, albeit a very large one, could cause so much disruption shows the fine line logistics companies often have to navigate to ensure goods get where they need to be.

It shows the precision in which the logistic sector is run – and how an error can be very costly.


Now the Ever Given has been moved and the canal back to full operation, the litigation starts.

The Suez Canal Authority, part of the Egyptian government, has seized the vessel and is demanding compensation of £666m from the Ever Given’s protection and indemnity insurer, UK Club.

It is understood that negotiations are still ongoing.

The amount will likely take into account the salvage operation, costs of stalled canal traffic and lost transit fees for the week that the Ever Given blocked the canal.
Litigation could be complex since the vessel is owned by a Japanese firm, operated by a Taiwanese shipper, and flagged in Panama.
It is said that the court order will help the canal authority reclaim the costs it incurred from the blockage. Loss of revenue from transit fees, which start at more than £70,000 per ship, ran to almost £11m a day.

The canal operator is also seeking compensation for repairs to damage caused when the Ever Given hit the right hand-bank of the waterway, along with costs related to dredging and salvage work.


The incident added strain to an industry already under pressure from the coronavirus pandemic, sparking fears for delayed goods, shortages and rising costs.

UK port operators warned British businesses to brace for disruption as they faced a surge of ships arriving at once, threatening to overwhelm their ability to handle so much traffic.
The Ever Given incident has made clear the scale of the logistics sector, the challenges it faces and how one mishap thousands of miles away can impact lives and businesses around the globe.

For more information on Beatons Group, visit beatons.co.uk

Image: Ever Given, credit Adam Howlett, Prominent PR