Port2Port Maritime - "Is the Suez Canal Safe for Shipping?" Global maritime threats
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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
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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?
Hinweis der Redaktion
- I did the rehearsal yesterday and now have focus on the specifics of the security situation and the response from the marsec industry, possible solutions, implications on insurance, etc. If you could piece something together for me please, about 10-12 slides max with associated handout, I can then top and tail and rehearse ahead of the day. if I can have this by cop next Fri?
- only approximately 300 meters (984 feet) wide. This means that canal traffic can only travel in one direction at a time for the long narrow stretches of the canal. Ships are sent through in three regularly scheduled convoys daily (two southbound and one northbound) at set times. There are some bypasses that allow convoys to pass each other, making passage through the canal more efficient. However, this scheduled convoy system would make it very easy to find a target at a selected attack site at a predictable time. Specific ships can even be tracked through the canal via the Internet.The narrowness of the canal means that in many places ships in the center of the canal will be within approximately 150 meters of either bank. This is well within the maximum effective range of most weapons systems, including the machine guns and rocket-propelled grenade launchers reportedly used in the attack on the Cosco Asia. The security concern is that due to the constricted nature of much of the canal -- and its maximum depth of 24 meters -- if a large ship such as the Cosco Asia could be sunk in the middle of the canal's channel at a narrow point, it could effectively halt traffic through the canal until the ship could be moved out of the channel. With Egypt receiving approximately $5 billion a year in transit fees, the canal is a significant source of revenue and foreign currency for the Egyptian government. Consequently, the canal is a potential target for militants who seek to hurt the Egyptian government.In recent weeks, the Suez Canal Authority has received threats from unidentified groups saying they would target the canal. These threats resulted in increased security along the canal, but this increase was not enough to stop Saturday's simple attack against the Cosco Asia using light weapons. The canal stretches some 190 kilometers (about 120 miles) from the Mediterranean to the Red Sea, and as we've noted elsewhere, completely protecting every inch of a long, linear target is a very difficult security undertaking.Still, following the failed attack, the Egyptian army established checkpoints every 20 kilometers along the canal, has increased mobile security patrols, installed more security cameras and has deployed additional army helicopters to monitor the canal. It will now be even more difficult to conduct a meaningful attack on a ship transiting the canal.Meaningful Attack?It was not surprising to hear that the small-arms attack directed against the Cosco Asia did not cause much damage, even if the attackers did employ rocket-propelled grenades. Light weapons are not sufficient to target a cargo ship that is nearly 350 meters long and which weighs about 114,000 metric tons. To help put the size of the Cosco Asia in perspective, it is slightly larger than the USS Ronald Reagan, a nuclear-powered aircraft carrier.Such vessels are not only very large, but they are also by necessity very well-built in order to handle the massive cargoes they haul in rough seas. As seen in the attacks against the USS Cole in October 2000 and the October 2002 attack against the oil tanker Limburg, both off of Yemen, it is very difficult to sink a large, modern ship even when you attack it with a potent boat bomb containing several hundred pounds of high explosives. Attacking such a ship with a light machine gun or rocket-propelled grenade could injure or kill some of the crew (modern vessels have very small crews, so hitting a member would require a great degree of skill or luck), but is quite unlikely to cause significant damage to the ship itself.So while the canal is long and difficult to completely secure, and ships transiting move relatively close to the shore at predictable times, it would be very difficult to conduct an attack that would effectively sink a ship and block the channel. It is relatively easy to move up to the bank of the canal with a light machine gun, but it would require far more logistical effort to construct a boat bomb like those employed in the Cole and Limburg attacks -- and even then the attack might not succeed.Additionally, due to its importance and vulnerability, the Egyptian government has established a security zone along the canal, which it patrols on land, by air and by patrol vessel. It is also notable that the small boat traffic in the Suez Canal is far lighter, and much more closely controlled than in a chaotic harbor like Aden, Yemen, so it would also be more difficult to get a boat bomb into the Suez Canal without being discovered than in Aden.There is also the potential threat of a ship being hijacked and scuttled in the canal. The Egyptian military closed the canal to traffic during the Suez Crisis in 1956 by scuttling some 40 ships in the canal. It was closed for approximately six months until the ships could be cleared from the canal. However, this would be quite a difficult undertaking for a militant group. Unlike the vast reaches of the Indian Ocean, where Somali pirates had time to chase and board ships, Egyptian security forces could respond very quickly to any piracy-type event in the canal. Also, the "citadel" tactic and other counterpiracy measures adopted to combat Somali piracy could also help protect ships transiting through the Suez Canal from being seized.Egyptian security forces have also closed the bridges spanning the canal at times in the past due to the possible threat of someone using explosives to drop a bridge into the canal to block it. But demolishing a bridge would take time and demolition expertise, and a vulnerable point target such as a bridge is relatively easy to secure from attack.Like many terrorist schemes, whether attempting to destroy a dam with a truck bomb, or taking down the Brooklyn Bridge with a blowtorch, blocking the Suez Canal would be much more difficult that it might appear at first glance.
- The potential for disaster …141 Vessels passed through the canal in November 2012 of this 18 were Passenger Vessels ….62 were LNG
- The potential for disaster …141 Vessels passed through the canal in November 2012 of this 18 were Passenger Vessels ….62 were LNG
- Effect on Maritime ContractsA central concern would be the frustration of existing shipping and charter party contracts, and whether a closure of the Suez Canal would indeed render those contracts unable to be performed. The basic principles of frustration of maritime contracts were set forth in Transatlantic Financing Corp. v. United States,[4] which has been applied by US courts in shipping disputes that involved a closure of the Suez Canal. US and UK courts have routinely held that where vessels were not trapped, but were merely required to seek an alternate route around the Suez Canal, the charter party was not frustrated and the shipowner was required to perform the contract. Generally, the closing of the Suez Canal in 1956 was held not to be sufficient reason to frustrate a charter party for vessels that had to take the longer, more costly voyage around the Cape of Good Hope.UK courts apply an even stricter standard than US courts. In Ocean Tramp Tankers Corp. v. V/O Sovfracht, the Court of Appeal failed to find frustration when the canal closing forced the vessel around the Cape of GoodHope on a voyage from the Black Sea to India.[6] Similarly, in Tsakiroglou & Co. v. Noblee & Thorl, G.m.b.H., the House of Lords found no frustration even though the canal closure caused costs to double.[7] UKcases tend to focus on whether the canal closure would render performance under the charter party "fundamentally" or "radically" different, while US cases and arbitrations focus more on whether the canal closure made performance "extremely and unreasonably" more expensive.SOURCE: However, the current situation in Egypt does not presently involve hostilities with other nations, a key factor in past closings of the canal. As such, breakdown clauses, exceptions clauses, and war clauses in charter parties would likely not relieve performance under the charter. Of course, a final determination would depend upon the specific events giving rise to a closure, along with the precise charter party and language used in theagreements. But the real lesson for owners and charterers is now is the to review clauses that allocate risks for a canal closure.
- However, the current situation in Egypt does not presently involve hostilities with other nations, a key factor in past closings of the canal. As such, breakdown clauses, exceptions clauses, and war clauses in charter parties would likely not relieve performance under the charter. Of course, a final determination would depend upon the specific events giving rise to a closure, along with the precise charter party and language used in theagreements. But the real lesson for owners and charterers is now is the to review clauses that allocate risks for a canal closure.as only one vessel of the 50-60 transiting the Suez Canal per day has been affected by the unrest, and that no damage resulted, an owner would not be entitled to reject a charterer’s orders to transit the Suez Canal unless the situation deteriorates.However, if things ever reach the stage where there is serious fighting on the banks of the canal and ships are regularly shot at with heavy weaponry, that could change.In certain circumstances, an owner may be relieved of contractual obligations if the alternative route renders the contractual performance radically different from the original agreement, a provision known in law as frustration.