Commerce Resumes after Blockage Caused by Container Ship Stuck in the Suez Canal

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09 April, 2021

John Pickervance
Partner and Head of Commercial

Traffic has finally resumed in Egypt's Suez Canal after a stranded container ship blocking it for nearly a week has finally been freed. A container ship, the Ever Given, passing through the Suez Canal on Tuesday 23rd March, brought a vital sea passageway to a halt, however the Suez Canal is finally open for business again allowing global trade to finally continue.

The Ever Given became free on Monday 29th March allowing one of the world's busiest trade routes to re-open, however, the effects caused could at least last for months as the hold up of containers valued approximately around $9 Billion per day. With this delay there will be a lag in arrivals, and this will result in a surge at certain ports causing disruption around the globe.

As an importer or exporter, you need to make sure shipping and delivery responsibilities are written down and are clearly understood between all parties. Using Incoterms, (the Chamber of Commerce's international commercial terms), in contracts can assist in doing this and describe the practical arrangements for the delivery of goods from sellers to buyers and allocate the obligations, costs and risks between the parties. Incoterms therefore are used to ensure the responsibilities and handovers are clearly defined and agreed within the contracts formed making them a great thing to be incorporated into contracts to have a good effect on supply agreements. The standardised terminology of the Incoterms used by all companies doing international business allow both suppliers and buyers to have a clear understanding of the rules and avoids any confusion of each party's responsibilities and costs. Those whose contracts were drafted to account for delays such as this will have been in a much more certain and less exposed position regarding the Suez Canal delays.

Commercial Law is a complex area and for business owners it is always worth considering how to protect shipments in case of situations like the above. This situation is not a likely one, however it is always good for buyers and sellers to understand what can happen if a situation like this ever arose and to incorporate this in a business's terms and conditions for the sale of goods.

For more information contact John Pickervance in our Commercial department via email or phone on 0333 207 1134. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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