March 23, 2022 • 27 mins
It's happened again. Another container ship owned by the Evergreen Maritime Corp. has gotten stuck a year after the Ever Given became lodged in the Suez Canal and briefly halted the flow of global trade. This time the grounding happened in the Chesapeake Bay and involves the Ever Forward -- a 1000-foot container ship which happens to be carrying the contents of Tracy's entire Hong Kong apartment. On this episode of Odd Lots, Tracy Alloway and Joe Weisenthal speak with maritime historian Sal Mercogliano about why another ship has gotten stuck, what it says about shipping and infrastructure, and how long Tracy might have to wait to get her stuff.
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Speaker 1 (00:05):
Hello, and welcome to another episode of the Odd Thoughts Podcast.
I'm Tracy Allaway and I'm Joe. Joe. Do you remember
that time I tried to ship a Teddy Bear in
a single container from Hong Kong to New York or
was it l a well to the US? Yeah? And
it basically the story is like, it's just so operationally
(00:25):
complex and paperwork and there was no space so much
and it didn't make it in the end, right, No,
I couldn't. Basically I couldn't get on a ship. I
kept getting bumped um and bumped and bumped, and finally
it seemed like it was going to be six months
until I could even get space, and so it didn't
seem morph it. And now now that I've moved to
New York, I got to repeat this entire experiment, um,
(00:48):
you know, in reality, and I got to put all
my apartment belongings into a container, put them on a ship,
and actually ship them from Hong Kong to New York.
Except it turns out I still can't actually ship anything
from Hong Kong to New York. I love how like
no one has more experience with the physical realities of
our commodity and infrastructure system than you between the teddy bear,
(01:11):
between the barrel of oil that you bought and kept
under your desk for a while, and now this. You
seem to have a knack for experiencing firsthand what the
rest of us just see is lines on the chart.
I think I have a knack for failed logistics. But
for our listeners, those who haven't been keeping abreast of
all the shipping news, there is another ship that is stuck.
(01:34):
This time it's stuck in the Chesapeake Bay, just outside
the port of Baltimore, and um you know, ironically, I
guess that irony isn't the right word here, but it
happens to be owned by the same company that owned
UM the Ever Given, the boat that got stuck in
the Suez Canal. Uh. This time the container ship is
(01:56):
called the ever Forward, only of course it's not going forward.
It's stuck in the mud with all my belongings in it.
So they Ever Given got a lot of attention, obviously
in part because it blocked all the traffic of the
Suis Canal, which everyone knows. I take it the ever Forward.
It doesn't seem to be blocking as much, I think,
but it has all your stuff on it that is correct.
(02:18):
So there were some some news reports around this, but
definitely not as much attention as the Ever Given, given
that that thing was blocking an actual percentage of global trade.
Who can no longer go through the canal? Um the
Chesapeake Bay remains open. But it's interesting to me personally
for obvious reasons. But it also the fact that this
(02:39):
has happened again feeds into a number of the themes
that we were discussing all throughout last year. And I
know we've been talking about a lot of other stuff recently,
but I think we have to dive into this one.
We owe it to odd lots listeners and ourselves. So
we are going to be speaking with sal Mercogliano. He
is a maritime historian and day history professor at Campbell University.
(03:02):
He also runs an excellent YouTube channel which has been
going in depth on what's actually happening with the ship
The Ever Forward. Sal thank you so much for coming
on the show. Well, thank you for having me. Why
don't we start with the basics, because you know, I
read the news articles. This thing has been stuck for
just over a week. Now, What exactly do we think
(03:24):
happened here? How can a massive container ship have this
kind of incident for a second time, sure, so Ever
Forward was on a routine voyage. She had come through
the Panama Canal and was stopping at four East Coast
US ports, had stopped already at Savannah and offloaded. It
had gone up to Baltimore and offloaded part of its cargo,
(03:45):
and it departed on the evening of March thirteenth and
was heading down to Norfolk and then eventually to New York.
So the ship departed routinely, came off the birth late
late in the evening early morning, and she seemed to
be allowing all the rules. I mean, everything seemed to
be fine. They were maneuvering. There seemed to be no
incidents with her. And she's part of this new class
(04:08):
of what's called the neo Panamax vessel. These are vessels
that can use the new lane of the Panama Canal
that was opened in so these East Coast ports have
been dredging and building to accommodate vessels like this. And
Ever Forward was heading southbound through the what's called the
Craig Hill Channel. This is the channel out of Baltimore
(04:28):
down to the Bay Bridge at Annapolis, and the ship
was following the track that it normally does in the
Dredge Channel, which is well lit, well charted. She had
a chess Peak bay pilot on board in addition to
her normal crew and master, and the vessel went through
the buoy's at the top of the channel, but proceeded
(04:48):
to keep going out of the channel. Didn't appear to
make the change at all to the course to head southbound,
and what she wound up doing was plowing into the
mud on the east side of the channel. She draws
about forty two ft of water in the condition she
was when she left Baltimore. She is now sitting in
anywhere between eighteen to twenty four ft of water about
(05:11):
an entire ship lengths off the channel. She's over a
thousand feet long. So what is what's being done right now?
And you mentioned the ship has been stuck for a
little over a week. What's been tried and what is
this sort of basic idea of what people are trying
to do to get the ship moving again. Sure, so
again we're not exactly sure what causes incident. Let me
go back that for a second. So you know there's
(05:33):
either a mechanical issue which is you know, she couldn't steer,
or it is a human error. Was there a miscommunication
between the pilot and the crew. Was there an issue
regarding uh the proper helm water? Did they lose their
situational awareness? I find the ladder the least likely because
this is a well lit channel. It's like a landing
(05:54):
zone for an airplane, well lit with the Booey's heading
to the bay bridge there. So we're probably looking at
a mechanic goal or communications error in regards to the
salvage of the vessel. So we're a week into this
at this point, and again, ever given took just six
days to get free, and now we're over a week
into this, and what they've begun to do is start
dredging in two areas, one off the stern of the
(06:16):
vessel and one off the forward bow of the vessel,
off the right side of the vessel. And what they're
trying to do is remove the mud and spoil from
around the propeller and runner of the vessel and also
trying to clear the forward bow an attempt to pull
the chan of the ship into the channel. The problem
is the amount of spoil that is there. This is
(06:38):
the material that had actually been removed from the channel,
and the method they're doing with the dredges they have
there are big for the United States, but they're not
like the vacuum dredges you see in the Suez Canal.
Give you an idea. The biggest dredge on seen here
can move about sixty cubic yards of material in each
of its moves with its big clams l The massuit,
(07:01):
which was the dredge used in the Suez Canal, could
move seventy thousand cubic yards of material in an hour
with its vacuum suction. Wait was that the was that
the little one that turned into a meme? Or was
that something else that was the big dredge? So was bright?
It wasn't the little digger, although I've seen a lot.
I've seen a lot of memes right now with a
little with the little digger on the way to the
(07:22):
United States. Can you just say those two numbers again,
how much could the Suez dredger do verse the one
that we have operating right now. Sure, so there's two
dredges right now and operating. The one off the bow
of the vessel can move about a fifteen cubic yards
in each move. The one off the stern, the Dale
Pilot Piet can move about sixty cubic yards. The Masure,
which is the big dredge that was used on every
(07:44):
given can move seventy thousand cubic yards an hour. Okay,
here's my question, why don't we have a bigger drudger? Well,
and that's a big issue, I would argue. You know,
one of the things that we've been talking about with
port infrastructure is the focus I mentioned the expand nine
the Suez Canal. So we've been dredging channels, we've been
bringing in these large ship to shore cranes. But one
(08:06):
of the things that has really lagged is our dredging capacity.
And we've seen recently through the Infrastructure Bill, money being
contributed or being allocated to build new drudges, and we're
seeing new dredges build. It is a priority that really
needs to be done. We we do not have sufficient
dredging capacity in the US, and there's a law that
(08:28):
requires there's the Dredging Act of nineteen o six that
requires dredges within the United States to be US owned,
US built, US crewed, very similar to the Jones Act.
Of and this is because we want dredges within the
United States. The problem is we just haven't a lot
of a lot of money to it, and there really
hasn't been the impetus to fund this, and I think
(08:50):
this incident is really highlighting that danger. I can't believe, Tracy,
We're gonna have to now do an episode an hour
just talking about America's systematic under estament in dredging capacity.
But at some point we're gonna have to do this.
But also why haven't we, I mean, why, like why
has there been this sort of underappreciation. I mean, I understand,
like dredging isn't just about getting ships unstuck, So why
(09:14):
this sort of systemic under investment. Well, it has to
do with the way we handle ports in the United States.
So you've you had Jean Saroka on Jean, what is
the CEO of the of the Port of Los Angeles.
Ports in the United States are owned by the states
and municipalities, so they are a local entity. Yet the
waters that connect those ports to the ocean are federal,
(09:36):
and so they fall under the Army Corps of Engineers specifically,
and so the Army Corps of Engineers has been tasked
to basically maintain the dredging, and they do it either
with their own fleet of dredgers or they contract out
with that. And you know, this comes back to everything
from Hurricane Katrina and and and the dikes and all
the waterways maintenance, and we just have under invested in this.
(10:00):
It's not a very sexy topic. No one likes to
talk about it, No one likes to pay money for
a dredge. It's you know, it's just not not not
as sexy as an aircraft carrier or something, you know,
more nautical. But it's absolutely essential. And one of the
things that we've seen happen again over the past decade
is these East Coast and Gulf Coast ports have been
using what dredges are available to get those channels down
(10:21):
to accommodate these larger vessels, these ultra large container vessels.
And while ever Forward is not an ultra large container vessels,
she's actually substantially smaller than ever given by about four
hundred feet and eight thousand boxes. She is still a
mammoth vessel when you look at her compared to the
vessels that have previously come into US ports. So we
(10:50):
build these massive container ships. And you know, Joe and
I have had a number of guests on at this
point talking about how the ships get bigger and bigger
and the reasons why that happens. But at the same time,
it doesn't seem like, again, we've made sufficient investment in
the infrastructure, if you include dredging in the category of infrastructure,
to actually make the whole system work efficiently, right And
(11:14):
I think that's that's a key element right there, because
one of the things we're watching is Okay, how can
we better improve it? And we've talked about, you know,
improving throughput in the ports everything from road, rail, dra
edge trucks, you name it. But again, the maintenance of
the ports are really essential and and be able to
flow the cargo. And in particularly one of the things
(11:34):
you're seeing right now is because of the backlogs on
the West coast that have been going on now for
over a year, you're seeing shippers, those who want to
move cargo are shifting over to the East coast. You know,
the ports of New York, of Charleston, Savannah, Baltimore, Norfolk,
Houston are actively seeking this this cargo and it's it's successful.
(11:55):
They're getting it you're seeing this matter fact, you're seeing
where you had seen backlogs off the Port of Los Angeles,
which they were over a hundred ships. Now they're down
to forty. Now we're seeing them off Charleston, we're seeing
them off Norfolk, we're seeing them off in New York,
and and we're kind of moving the issue. And Port
of Baltimore in particularly is a very interesting port because
it does not just containers, it does bulk cargo coal
(12:16):
in particularly, a lot of vehicles moved through. It's an
active moving port, and so moving ships in and out
as expeditiously as you can becomes a priority. And there's
gonna be a question about was ever Forward going too
fast for the channel she was in, because the faster
you go, And it's literally the same thing with ever
Given too. If every Given hadn't going been going as
(12:39):
fast thirteen knots and ever Forward was doing thirteen knots too,
had they been going slower, the salvage and the damage
and the ability to get the vessels off would have
been minimized. Is that faster than they should be going
in either in either the Suez or the chest Peak. Well,
it's funny you said that because I had Traffic, which
(13:00):
is an A I S tracking app which does all
the kind of monitoring. Ever, Forward came through this same
area in December, and when she came through in December,
she did roughly the same speed, so it was roughly
about twelve thirteen knots she was using coming in. So
I was able to see her her her departure and
it seemed to be the same exact Now she may
speed it up just a little bit prematurely before turning
(13:23):
into the channel, and that's something that's going to have
to be investigated. So I want to ask a question
which is very important to me personally, but what are
what are the chances that something really bad happens in
the situation and my entire apartments belongings is just like
(13:43):
jettisoned into the ocean, or I don't know, if the
ship cracks up and I lose everything. Is that is
that an above zero percent chance? Uh? I would say,
You're not without some worries, Tracy. I think I think
one of the reasons we're seeing this this salvage taking
time again. I think the coast Guards announcement that she'll
(14:04):
be free this week is very premature. Bill Doyle, who's
the CEO of the Port of Baltimore headed the Dredger
Association of the United States. I mean he he knows stredging,
and he says this is gonna take several weeks. UH.
Since the vessel is fully aground, meaning its bottom is
touching again, she draws water. She's an eighteen to twenty
four ft of water. She's literally up higher than she
(14:27):
normally is sitting on mud. They have to be concerned
about several issues. Number One, this vessel cracking UH. She
ships are designed is a ship that brand new. UH
ships are not designed to touch anything. They're designed to
be buoyant, and the hulls are very thin in certain areas,
I'm talking millimeters thick. And you know what you have
(14:49):
to worry about is the vessel shifting, moving and cracking.
This could necessitate an oil spill, for example, or fuel spill,
so they want to move her very carefully. The other
thing is, since she's there's no buoyancy acting on her,
there's nothing pushing her up to keep her afloat. Everything
is pushing down. And what you have to worry about
is if you pull her back into the channel, she's
she went out to the channel to the east side,
(15:11):
so you have to pull her to the west. You
don't want the vessel to roll, and that's the worst
case scenario, in which case your apartment goods would then
be wet in the ocean or in the bay. This
leads to my next question. I guess it's there's it's
the two potential A. If Tracy's entire apartment good to
go into the ocean, who pays her for that? But
(15:32):
be who is paying right now? Assuming Tracy does get
her stuff? But how are the sort of costs of
delay allocated? Right? We all we all remember the law
of general averages from previous episodes. So I'm also worried
about my liability and whether or not I end up
paying for the contents of this entire ship. Well, I'm
glad you mentioned Tracey, because that's what I was gonna lose. Tom.
(15:55):
I'm hoping you have insurance on this because right now,
this this entire salvage is being done by Evergreen, the
company associated with this, and they have not yet declared
general average, in which case the cargo would have to
bear a portion of the salvage. Right now, it's under
the protection and indemnity club that ensures the vessel. So
(16:16):
they're paying for the salvage right now. And you know
they contracted with Don John SMIT, which is actually a
combined company doing the salvage. SMIT had done the salvage
on ever given in the Suez, and so now Don
John Smit are doing this. And again there are certain
liabilities they're gonna have to be looked at. Number One,
cargo delay. Uh, this cargo is not going to be
(16:38):
delivered on time, so there may be liabilities against that.
But again, if the vessel has a catastrophic issue, then
that may be something that has to be done. And
under shipping agreements, the cargo bears part of the responsibility.
If they declare general average, then the question becomes does
the cargo pay. This is why whenever you ship anything
(16:59):
you need to get insurance on it because if not,
you open yourself up to huge liability. They may have
to start taking containers off this vessel if they really
if they think they can't move it safely. She didn't
have that much ballast on her because the ship has
offloaded cargo. Ships tend not to take ballast in what
they call brown water. They like to do it out
(17:20):
in the ocean and blue water, because they have to
run that ballast water through a system to clean it,
to purify it. And that's expensive because you have to
pump off that material at the end. So this ship
probably didn't have very much ballast on board. They were
probably gonna ballast after they left New York. So that
means taking fuel off. And if that's not enough, the
problem with that is it raises the center of gravity
(17:42):
of the vessel. That means you're gonna start taking those
loaded containers at the very top off and that is
a complicated problem. You need huge cranes to come out
to do it. It's a very slow process, but that
may be necessary. While we're here and look at reading
a little bit more about the Foreign Dredge Act of
suddenly really that you know, I know, sometimes like you
(18:02):
talk about, oh, can the President suspend or pause the
Jones Act? And sometimes you hear about that during emergencies,
can the president do anything that could we get a
bigger dredge from another country just temporarily you can waive
the Dredge Act and bring it in the problem you have,
of course, is whatever foreign dredge exist is not here,
it's gonna be a delay to get it over here.
(18:23):
And one of the reasons that this Dredge Act was
enacted was to ensure that we had dredges in the
United States that could do this, so that in case
of an emergency, in case of an accident like this
where a ship runs aground. Unfortunately, ever Forward went out
of the channel. She hasn't blocked Baltimore, so you know,
we still see the free movement. However, when they do
(18:44):
salvage her, she's going to temporarily block the channel to
bring it out. But I think this again goes to
that idea of infrastructure. You know, one of the things
we're not talking about two is the size of tugs.
You know, it was estimated that this ship grounded and
there's a grounding force. The amount of poll you would
need to pull her off, according to naval architects. I've
talked to the marine industry uh AXCUME ME, the Marine
(19:07):
Innovation Safety Lab. They've estimated it's going to take anywhere
from twenty to two thousand metric tons of pull to
get her off. A normal tug pulls about sixty tons,
So it gives you the idea of of what you need.
And again we're not investing a lot in our tug boats,
which sounds very small. I know it's not a very
(19:27):
sexy topic, but in truth, as these vessels get bigger,
they're much bigger than the tugs that were designed to
handle vessels ten twenty thirty years ago. You know, we've
seen okay, at least two of these incidents at this
point involving large ships getting stuck somewhere and then all
(19:51):
the efforts to actually move them. What are the chances that,
instead of building out the infrastructure, so getting bigger dredgers,
getting bigger to boats, widening channels and things like that,
that we settled for smaller container ships. Is that realistic
or desirable at all? Well, I would say two things
on that trace. Number one, we will continue to get
(20:13):
vessels bigger and larger than even this, because insurance companies
will keep ensuring them, and ports will keep accepting them,
and operators will keep getting them. I should say that
right now, right in the midst of this grounding, Evergreen,
the parent company, just ordered three ultra large container vessels,
twenty four thousand box vessels. They did the same thing,
(20:35):
by the way, when ever given had run Ashore. Literally
a day or two after ever Given ran Ashore, they
placed a huge order for these vessels. They love these
vessels because their economy of scale. Again, you know, the longer, wider,
bigger makeum, the more efficient it is for them. There
are things that can be done to do this. The
problem is it shifts cost onto transportation, which in turn
(20:58):
in turn gets passed on to the consumer. If you
slow down these vessels, if if you you know, require
tug escorts and things like that, you're going to make
it more expensive. And if you go for smaller vessels,
that becomes even more expensive. We can talk for hours
about this. I found this conversation to be riveting. But
you know, just my last question is basically we had
(21:18):
the ever Given, now the ever forward a. How like
rare is this? I mean, like, you know, normally I
don't think ships running aground, particularly if they don't either
in the US or if they don't block the Swiss
Canal probably get much news attention. How rare is it
to have these sort of two big incidents within the
span of I guess, I guess a year. But then also,
(21:38):
how much generally is are these attributable to the overall
shipping conditions, which we talked about being extremely tight. I'm
thinking about, Okay, they are going maybe a little faster
than they should be, or going to ports that they
might not otherwise be going to do to redistribution of
port capacity. So how much how unusual is this? But
how much can we sort of tie these in it
(22:00):
into the tight global shipping market. Well, I think in
terms of the size of the vessels, that's that's the
big issue we're seeing right now. So ships du ground
fairly commonly. It was just a mare ship that grounded
on the approaches into Germany, for example, but they were
able to free her fairly quickly. The problem with big
vessels like ever Given, like ever Forward, is that when
(22:20):
an incident happens with them, they magnify the level of
of salvage needed because there's so much bigger than we're
talking about. Again, ever Forward is smaller than ever Given,
but she still were a thousand feet long. She's is
longer than the largest aircraft carrier we have. So they're
tremendous vessels that we're talking about, and any incident involving
them requires a lot more resources than we've had in
(22:43):
the past. So I think you have that element about it.
And again, this fuels the world economy because we're able
to move goods seamlessly at very low transportation costs. And
particularly again you know, ever forward is a good indication
of that movement of cargo from the West coast to
the East coast. I think on the other aspect there
(23:03):
that you were kind of alluding to, I think we
also have issues we have to remember during COVID, This
has been going on now for two years, and one
of the stories that doesn't get a lot of attention, unfortunately,
is the one point eight million mariners who crew these
vessels and issues with everything from being able to get
them off for normal crew rotations. Uh. You know, as
the ships get bigger and larger, the crews get smaller,
(23:25):
and and you know now with with cruise, because most
of this is done by feign crews top five you
know crewing nations in the world. You know Indonesia, India, China,
Philippines and Russia. You know, those crews can't get off
in Baltimore typically and fly home for a crew rotation,
and some ports during COVID wouldn't let the cruise even
step on the dock. And so where you would have
(23:46):
crews on board for two, four or six months there
over a year on board, and so you know, I
think I think crew rotation, crew fatigue, and you know
what we expect of these marriage. Plus we're we're shopping
around for the cheapest mariners out there too, so you
know we're looking. You know, hey, you're getting too expensive.
So I'm going to go to this country next and
and go get them. And unfortunately, you know, mariners don't
(24:08):
really register very well. Look at the you know, nearly
dozen dozens of ships stuck in Ukraine right now that
you know the mariners are trying to get off, and
and not a lot of stories about those unfortunate Yeah,
we had COVID and people stuck because of those restrictions,
and now the situation in Ukraine as well, it just
seems never ending. We're going to have to leave it
(24:28):
there because we are rushing this out as a bonus episode,
so we're a bit limited on time, but really appreciate
you coming on, and I have a feeling we might
end up speaking about this again. We've got to have
Sale back. I could talk to Sale. Thank you so
much coming on. Thank you for having me guys. So
that was a sal Murcogliano. I should just say his
YouTube channel is called what is going On with Shipping,
(24:50):
and he's providing really detailed updates of what's going on
with the ever forward, So if you're interested, you should
definitely check those out. So, Joe, I just have to
clarify one thing because our producer actually messaged me while
we were discussing, um, what's going on in the intro,
and he asked me if I'm joking about my stuff
being stuck on the ship. For total clarity, I am
(25:11):
not joking. There's a lot of nervous laughter here because
it is quite stressful to think that everything that I
have might be stuck on a ship that's you know,
there's a question mark over whether it's going to be
able to get off of its mud bank. But yes,
my stuff is actually on that ship. Yeah, this is
so crazy and so wild, and I'm like, I just
(25:31):
want to say, I'm thinking about making my entire identity
be one of repealing the Foreign Dredge Act of I
think that could be like a new like I might
make that my thing. It is like a really like
to learn, like we have a shortage of dredge capacity.
We have a shortage of tugboat capacity in the US.
(25:52):
So many interesting things I learned in that short period
of time. And I'm very sad that you don't have
your stuff from Hong Kong, but I'm selfishly happy that
this turned into such a illuminating discussion we get to
talk more about it. I would just say, you know,
I am now the face of structural under investment in
our ports and our tugboats and our dredges, and you know,
(26:15):
it's inconvenient not being able to sit on the couch
for over two months now. Um, I would like to
have a couch at some point. But I did also
think that Sala's point about what's going on with seafarers
is an important one because that has been two years
of a regulatory and logistical nightmare for people who are
(26:35):
actually working on ships, and especially in Asia. We heard
stories of people, you know, who had been stuck on
board and couldn't get home for months, if not more
than a year at a time. So definitely worth mentioning. Yeah,
we talked about the physical infrastructure a lot, but the
toll on the people actually keeping it going it is
obviously met. Yeah, all right, well, it looks like we
(26:58):
have a lot more to discuss on the shipping front,
and I'm sure we'll have some future episodes on this topic,
but for now, shall we leave it there? Let's leave
it there? All right? This has been another episode of
the All Thoughts podcast. I'm Tracy Alloway. You can follow
me on Twitter at Tracy Alloway and I'm Joe Why
Isn't All? You can follow me on Twitter at the Stalwart.
Follow our guest Sam Rcagliano. He's at marcagliano s. Also
(27:21):
definitely check out his YouTube's big thanks for our producers,
Magnus Hendrickson and Colin Tipton. Follow the Bloomberg head of podcast,
Francesca Levi at Francesca Today, and check out all of
our podcasts in Bloomberg under the handle at podcasts. Thanks
for listening.
Hello, and welcome to another episode of the Odd Thoughts Podcast.
I'm Tracy Allaway and I'm Joe. Joe. Do you remember
that time I tried to ship a Teddy Bear in
a single container from Hong Kong to New York or
was it l a well to the US? Yeah? And
it basically the story is like, it's just so operationally
(00:25):
complex and paperwork and there was no space so much
and it didn't make it in the end, right, No,
I couldn't. Basically I couldn't get on a ship. I
kept getting bumped um and bumped and bumped, and finally
it seemed like it was going to be six months
until I could even get space, and so it didn't
seem morph it. And now now that I've moved to
New York, I got to repeat this entire experiment, um,
(00:48):
you know, in reality, and I got to put all
my apartment belongings into a container, put them on a ship,
and actually ship them from Hong Kong to New York.
Except it turns out I still can't actually ship anything
from Hong Kong to New York. I love how like
no one has more experience with the physical realities of
our commodity and infrastructure system than you between the teddy bear,
(01:11):
between the barrel of oil that you bought and kept
under your desk for a while, and now this. You
seem to have a knack for experiencing firsthand what the
rest of us just see is lines on the chart.
I think I have a knack for failed logistics. But
for our listeners, those who haven't been keeping abreast of
all the shipping news, there is another ship that is stuck.
(01:34):
This time it's stuck in the Chesapeake Bay, just outside
the port of Baltimore, and um you know, ironically, I
guess that irony isn't the right word here, but it
happens to be owned by the same company that owned
UM the Ever Given, the boat that got stuck in
the Suez Canal. Uh. This time the container ship is
(01:56):
called the ever Forward, only of course it's not going forward.
It's stuck in the mud with all my belongings in it.
So they Ever Given got a lot of attention, obviously
in part because it blocked all the traffic of the
Suis Canal, which everyone knows. I take it the ever Forward.
It doesn't seem to be blocking as much, I think,
but it has all your stuff on it that is correct.
(02:18):
So there were some some news reports around this, but
definitely not as much attention as the Ever Given, given
that that thing was blocking an actual percentage of global trade.
Who can no longer go through the canal? Um the
Chesapeake Bay remains open. But it's interesting to me personally
for obvious reasons. But it also the fact that this
(02:39):
has happened again feeds into a number of the themes
that we were discussing all throughout last year. And I
know we've been talking about a lot of other stuff recently,
but I think we have to dive into this one.
We owe it to odd lots listeners and ourselves. So
we are going to be speaking with sal Mercogliano. He
is a maritime historian and day history professor at Campbell University.
(03:02):
He also runs an excellent YouTube channel which has been
going in depth on what's actually happening with the ship
The Ever Forward. Sal thank you so much for coming
on the show. Well, thank you for having me. Why
don't we start with the basics, because you know, I
read the news articles. This thing has been stuck for
just over a week. Now, What exactly do we think
(03:24):
happened here? How can a massive container ship have this
kind of incident for a second time, sure, so Ever
Forward was on a routine voyage. She had come through
the Panama Canal and was stopping at four East Coast
US ports, had stopped already at Savannah and offloaded. It
had gone up to Baltimore and offloaded part of its cargo,
(03:45):
and it departed on the evening of March thirteenth and
was heading down to Norfolk and then eventually to New York.
So the ship departed routinely, came off the birth late
late in the evening early morning, and she seemed to
be allowing all the rules. I mean, everything seemed to
be fine. They were maneuvering. There seemed to be no
incidents with her. And she's part of this new class
(04:08):
of what's called the neo Panamax vessel. These are vessels
that can use the new lane of the Panama Canal
that was opened in so these East Coast ports have
been dredging and building to accommodate vessels like this. And
Ever Forward was heading southbound through the what's called the
Craig Hill Channel. This is the channel out of Baltimore
(04:28):
down to the Bay Bridge at Annapolis, and the ship
was following the track that it normally does in the
Dredge Channel, which is well lit, well charted. She had
a chess Peak bay pilot on board in addition to
her normal crew and master, and the vessel went through
the buoy's at the top of the channel, but proceeded
(04:48):
to keep going out of the channel. Didn't appear to
make the change at all to the course to head southbound,
and what she wound up doing was plowing into the
mud on the east side of the channel. She draws
about forty two ft of water in the condition she
was when she left Baltimore. She is now sitting in
anywhere between eighteen to twenty four ft of water about
(05:11):
an entire ship lengths off the channel. She's over a
thousand feet long. So what is what's being done right now?
And you mentioned the ship has been stuck for a
little over a week. What's been tried and what is
this sort of basic idea of what people are trying
to do to get the ship moving again. Sure, so
again we're not exactly sure what causes incident. Let me
go back that for a second. So you know there's
(05:33):
either a mechanical issue which is you know, she couldn't steer,
or it is a human error. Was there a miscommunication
between the pilot and the crew. Was there an issue
regarding uh the proper helm water? Did they lose their
situational awareness? I find the ladder the least likely because
this is a well lit channel. It's like a landing
(05:54):
zone for an airplane, well lit with the Booey's heading
to the bay bridge there. So we're probably looking at
a mechanic goal or communications error in regards to the
salvage of the vessel. So we're a week into this
at this point, and again, ever given took just six
days to get free, and now we're over a week
into this, and what they've begun to do is start
dredging in two areas, one off the stern of the
(06:16):
vessel and one off the forward bow of the vessel,
off the right side of the vessel. And what they're
trying to do is remove the mud and spoil from
around the propeller and runner of the vessel and also
trying to clear the forward bow an attempt to pull
the chan of the ship into the channel. The problem
is the amount of spoil that is there. This is
(06:38):
the material that had actually been removed from the channel,
and the method they're doing with the dredges they have
there are big for the United States, but they're not
like the vacuum dredges you see in the Suez Canal.
Give you an idea. The biggest dredge on seen here
can move about sixty cubic yards of material in each
of its moves with its big clams l The massuit,
(07:01):
which was the dredge used in the Suez Canal, could
move seventy thousand cubic yards of material in an hour
with its vacuum suction. Wait was that the was that
the little one that turned into a meme? Or was
that something else that was the big dredge? So was bright?
It wasn't the little digger, although I've seen a lot.
I've seen a lot of memes right now with a
little with the little digger on the way to the
(07:22):
United States. Can you just say those two numbers again,
how much could the Suez dredger do verse the one
that we have operating right now. Sure, so there's two
dredges right now and operating. The one off the bow
of the vessel can move about a fifteen cubic yards
in each move. The one off the stern, the Dale
Pilot Piet can move about sixty cubic yards. The Masure,
which is the big dredge that was used on every
(07:44):
given can move seventy thousand cubic yards an hour. Okay,
here's my question, why don't we have a bigger drudger? Well,
and that's a big issue, I would argue. You know,
one of the things that we've been talking about with
port infrastructure is the focus I mentioned the expand nine
the Suez Canal. So we've been dredging channels, we've been
bringing in these large ship to shore cranes. But one
(08:06):
of the things that has really lagged is our dredging capacity.
And we've seen recently through the Infrastructure Bill, money being
contributed or being allocated to build new drudges, and we're
seeing new dredges build. It is a priority that really
needs to be done. We we do not have sufficient
dredging capacity in the US, and there's a law that
(08:28):
requires there's the Dredging Act of nineteen o six that
requires dredges within the United States to be US owned,
US built, US crewed, very similar to the Jones Act.
Of and this is because we want dredges within the
United States. The problem is we just haven't a lot
of a lot of money to it, and there really
hasn't been the impetus to fund this, and I think
(08:50):
this incident is really highlighting that danger. I can't believe, Tracy,
We're gonna have to now do an episode an hour
just talking about America's systematic under estament in dredging capacity.
But at some point we're gonna have to do this.
But also why haven't we, I mean, why, like why
has there been this sort of underappreciation. I mean, I understand,
like dredging isn't just about getting ships unstuck, So why
(09:14):
this sort of systemic under investment. Well, it has to
do with the way we handle ports in the United States.
So you've you had Jean Saroka on Jean, what is
the CEO of the of the Port of Los Angeles.
Ports in the United States are owned by the states
and municipalities, so they are a local entity. Yet the
waters that connect those ports to the ocean are federal,
(09:36):
and so they fall under the Army Corps of Engineers specifically,
and so the Army Corps of Engineers has been tasked
to basically maintain the dredging, and they do it either
with their own fleet of dredgers or they contract out
with that. And you know, this comes back to everything
from Hurricane Katrina and and and the dikes and all
the waterways maintenance, and we just have under invested in this.
(10:00):
It's not a very sexy topic. No one likes to
talk about it, No one likes to pay money for
a dredge. It's you know, it's just not not not
as sexy as an aircraft carrier or something, you know,
more nautical. But it's absolutely essential. And one of the
things that we've seen happen again over the past decade
is these East Coast and Gulf Coast ports have been
using what dredges are available to get those channels down
(10:21):
to accommodate these larger vessels, these ultra large container vessels.
And while ever Forward is not an ultra large container vessels,
she's actually substantially smaller than ever given by about four
hundred feet and eight thousand boxes. She is still a
mammoth vessel when you look at her compared to the
vessels that have previously come into US ports. So we
(10:50):
build these massive container ships. And you know, Joe and
I have had a number of guests on at this
point talking about how the ships get bigger and bigger
and the reasons why that happens. But at the same time,
it doesn't seem like, again, we've made sufficient investment in
the infrastructure, if you include dredging in the category of infrastructure,
to actually make the whole system work efficiently, right And
(11:14):
I think that's that's a key element right there, because
one of the things we're watching is Okay, how can
we better improve it? And we've talked about, you know,
improving throughput in the ports everything from road, rail, dra
edge trucks, you name it. But again, the maintenance of
the ports are really essential and and be able to
flow the cargo. And in particularly one of the things
(11:34):
you're seeing right now is because of the backlogs on
the West coast that have been going on now for
over a year, you're seeing shippers, those who want to
move cargo are shifting over to the East coast. You know,
the ports of New York, of Charleston, Savannah, Baltimore, Norfolk,
Houston are actively seeking this this cargo and it's it's successful.
(11:55):
They're getting it you're seeing this matter fact, you're seeing
where you had seen backlogs off the Port of Los Angeles,
which they were over a hundred ships. Now they're down
to forty. Now we're seeing them off Charleston, we're seeing
them off Norfolk, we're seeing them off in New York,
and and we're kind of moving the issue. And Port
of Baltimore in particularly is a very interesting port because
it does not just containers, it does bulk cargo coal
(12:16):
in particularly, a lot of vehicles moved through. It's an
active moving port, and so moving ships in and out
as expeditiously as you can becomes a priority. And there's
gonna be a question about was ever Forward going too
fast for the channel she was in, because the faster
you go, And it's literally the same thing with ever
Given too. If every Given hadn't going been going as
(12:39):
fast thirteen knots and ever Forward was doing thirteen knots too,
had they been going slower, the salvage and the damage
and the ability to get the vessels off would have
been minimized. Is that faster than they should be going
in either in either the Suez or the chest Peak. Well,
it's funny you said that because I had Traffic, which
(13:00):
is an A I S tracking app which does all
the kind of monitoring. Ever, Forward came through this same
area in December, and when she came through in December,
she did roughly the same speed, so it was roughly
about twelve thirteen knots she was using coming in. So
I was able to see her her her departure and
it seemed to be the same exact Now she may
speed it up just a little bit prematurely before turning
(13:23):
into the channel, and that's something that's going to have
to be investigated. So I want to ask a question
which is very important to me personally, but what are
what are the chances that something really bad happens in
the situation and my entire apartments belongings is just like
(13:43):
jettisoned into the ocean, or I don't know, if the
ship cracks up and I lose everything. Is that is
that an above zero percent chance? Uh? I would say,
You're not without some worries, Tracy. I think I think
one of the reasons we're seeing this this salvage taking
time again. I think the coast Guards announcement that she'll
(14:04):
be free this week is very premature. Bill Doyle, who's
the CEO of the Port of Baltimore headed the Dredger
Association of the United States. I mean he he knows stredging,
and he says this is gonna take several weeks. UH.
Since the vessel is fully aground, meaning its bottom is
touching again, she draws water. She's an eighteen to twenty
four ft of water. She's literally up higher than she
(14:27):
normally is sitting on mud. They have to be concerned
about several issues. Number One, this vessel cracking UH. She
ships are designed is a ship that brand new. UH
ships are not designed to touch anything. They're designed to
be buoyant, and the hulls are very thin in certain areas,
I'm talking millimeters thick. And you know what you have
(14:49):
to worry about is the vessel shifting, moving and cracking.
This could necessitate an oil spill, for example, or fuel spill,
so they want to move her very carefully. The other
thing is, since she's there's no buoyancy acting on her,
there's nothing pushing her up to keep her afloat. Everything
is pushing down. And what you have to worry about
is if you pull her back into the channel, she's
she went out to the channel to the east side,
(15:11):
so you have to pull her to the west. You
don't want the vessel to roll, and that's the worst
case scenario, in which case your apartment goods would then
be wet in the ocean or in the bay. This
leads to my next question. I guess it's there's it's
the two potential A. If Tracy's entire apartment good to
go into the ocean, who pays her for that? But
(15:32):
be who is paying right now? Assuming Tracy does get
her stuff? But how are the sort of costs of
delay allocated? Right? We all we all remember the law
of general averages from previous episodes. So I'm also worried
about my liability and whether or not I end up
paying for the contents of this entire ship. Well, I'm
glad you mentioned Tracey, because that's what I was gonna lose. Tom.
(15:55):
I'm hoping you have insurance on this because right now,
this this entire salvage is being done by Evergreen, the
company associated with this, and they have not yet declared
general average, in which case the cargo would have to
bear a portion of the salvage. Right now, it's under
the protection and indemnity club that ensures the vessel. So
(16:16):
they're paying for the salvage right now. And you know
they contracted with Don John SMIT, which is actually a
combined company doing the salvage. SMIT had done the salvage
on ever given in the Suez, and so now Don
John Smit are doing this. And again there are certain
liabilities they're gonna have to be looked at. Number One,
cargo delay. Uh, this cargo is not going to be
(16:38):
delivered on time, so there may be liabilities against that.
But again, if the vessel has a catastrophic issue, then
that may be something that has to be done. And
under shipping agreements, the cargo bears part of the responsibility.
If they declare general average, then the question becomes does
the cargo pay. This is why whenever you ship anything
(16:59):
you need to get insurance on it because if not,
you open yourself up to huge liability. They may have
to start taking containers off this vessel if they really
if they think they can't move it safely. She didn't
have that much ballast on her because the ship has
offloaded cargo. Ships tend not to take ballast in what
they call brown water. They like to do it out
(17:20):
in the ocean and blue water, because they have to
run that ballast water through a system to clean it,
to purify it. And that's expensive because you have to
pump off that material at the end. So this ship
probably didn't have very much ballast on board. They were
probably gonna ballast after they left New York. So that
means taking fuel off. And if that's not enough, the
problem with that is it raises the center of gravity
(17:42):
of the vessel. That means you're gonna start taking those
loaded containers at the very top off and that is
a complicated problem. You need huge cranes to come out
to do it. It's a very slow process, but that
may be necessary. While we're here and look at reading
a little bit more about the Foreign Dredge Act of
suddenly really that you know, I know, sometimes like you
(18:02):
talk about, oh, can the President suspend or pause the
Jones Act? And sometimes you hear about that during emergencies,
can the president do anything that could we get a
bigger dredge from another country just temporarily you can waive
the Dredge Act and bring it in the problem you have,
of course, is whatever foreign dredge exist is not here,
it's gonna be a delay to get it over here.
(18:23):
And one of the reasons that this Dredge Act was
enacted was to ensure that we had dredges in the
United States that could do this, so that in case
of an emergency, in case of an accident like this
where a ship runs aground. Unfortunately, ever Forward went out
of the channel. She hasn't blocked Baltimore, so you know,
we still see the free movement. However, when they do
(18:44):
salvage her, she's going to temporarily block the channel to
bring it out. But I think this again goes to
that idea of infrastructure. You know, one of the things
we're not talking about two is the size of tugs.
You know, it was estimated that this ship grounded and
there's a grounding force. The amount of poll you would
need to pull her off, according to naval architects. I've
talked to the marine industry uh AXCUME ME, the Marine
(19:07):
Innovation Safety Lab. They've estimated it's going to take anywhere
from twenty to two thousand metric tons of pull to
get her off. A normal tug pulls about sixty tons,
So it gives you the idea of of what you need.
And again we're not investing a lot in our tug boats,
which sounds very small. I know it's not a very
(19:27):
sexy topic, but in truth, as these vessels get bigger,
they're much bigger than the tugs that were designed to
handle vessels ten twenty thirty years ago. You know, we've
seen okay, at least two of these incidents at this
point involving large ships getting stuck somewhere and then all
(19:51):
the efforts to actually move them. What are the chances that,
instead of building out the infrastructure, so getting bigger dredgers,
getting bigger to boats, widening channels and things like that,
that we settled for smaller container ships. Is that realistic
or desirable at all? Well, I would say two things
on that trace. Number one, we will continue to get
(20:13):
vessels bigger and larger than even this, because insurance companies
will keep ensuring them, and ports will keep accepting them,
and operators will keep getting them. I should say that
right now, right in the midst of this grounding, Evergreen,
the parent company, just ordered three ultra large container vessels,
twenty four thousand box vessels. They did the same thing,
(20:35):
by the way, when ever given had run Ashore. Literally
a day or two after ever Given ran Ashore, they
placed a huge order for these vessels. They love these
vessels because their economy of scale. Again, you know, the longer, wider,
bigger makeum, the more efficient it is for them. There
are things that can be done to do this. The
problem is it shifts cost onto transportation, which in turn
(20:58):
in turn gets passed on to the consumer. If you
slow down these vessels, if if you you know, require
tug escorts and things like that, you're going to make
it more expensive. And if you go for smaller vessels,
that becomes even more expensive. We can talk for hours
about this. I found this conversation to be riveting. But
you know, just my last question is basically we had
(21:18):
the ever Given, now the ever forward a. How like
rare is this? I mean, like, you know, normally I
don't think ships running aground, particularly if they don't either
in the US or if they don't block the Swiss
Canal probably get much news attention. How rare is it
to have these sort of two big incidents within the
span of I guess, I guess a year. But then also,
(21:38):
how much generally is are these attributable to the overall
shipping conditions, which we talked about being extremely tight. I'm
thinking about, Okay, they are going maybe a little faster
than they should be, or going to ports that they
might not otherwise be going to do to redistribution of
port capacity. So how much how unusual is this? But
how much can we sort of tie these in it
(22:00):
into the tight global shipping market. Well, I think in
terms of the size of the vessels, that's that's the
big issue we're seeing right now. So ships du ground
fairly commonly. It was just a mare ship that grounded
on the approaches into Germany, for example, but they were
able to free her fairly quickly. The problem with big
vessels like ever Given, like ever Forward, is that when
(22:20):
an incident happens with them, they magnify the level of
of salvage needed because there's so much bigger than we're
talking about. Again, ever Forward is smaller than ever Given,
but she still were a thousand feet long. She's is
longer than the largest aircraft carrier we have. So they're
tremendous vessels that we're talking about, and any incident involving
them requires a lot more resources than we've had in
(22:43):
the past. So I think you have that element about it.
And again, this fuels the world economy because we're able
to move goods seamlessly at very low transportation costs. And
particularly again you know, ever forward is a good indication
of that movement of cargo from the West coast to
the East coast. I think on the other aspect there
(23:03):
that you were kind of alluding to, I think we
also have issues we have to remember during COVID, This
has been going on now for two years, and one
of the stories that doesn't get a lot of attention, unfortunately,
is the one point eight million mariners who crew these
vessels and issues with everything from being able to get
them off for normal crew rotations. Uh. You know, as
the ships get bigger and larger, the crews get smaller,
(23:25):
and and you know now with with cruise, because most
of this is done by feign crews top five you
know crewing nations in the world. You know Indonesia, India, China,
Philippines and Russia. You know, those crews can't get off
in Baltimore typically and fly home for a crew rotation,
and some ports during COVID wouldn't let the cruise even
step on the dock. And so where you would have
(23:46):
crews on board for two, four or six months there
over a year on board, and so you know, I
think I think crew rotation, crew fatigue, and you know
what we expect of these marriage. Plus we're we're shopping
around for the cheapest mariners out there too, so you
know we're looking. You know, hey, you're getting too expensive.
So I'm going to go to this country next and
and go get them. And unfortunately, you know, mariners don't
(24:08):
really register very well. Look at the you know, nearly
dozen dozens of ships stuck in Ukraine right now that
you know the mariners are trying to get off, and
and not a lot of stories about those unfortunate Yeah,
we had COVID and people stuck because of those restrictions,
and now the situation in Ukraine as well, it just
seems never ending. We're going to have to leave it
(24:28):
there because we are rushing this out as a bonus episode,
so we're a bit limited on time, but really appreciate
you coming on, and I have a feeling we might
end up speaking about this again. We've got to have
Sale back. I could talk to Sale. Thank you so
much coming on. Thank you for having me guys. So
that was a sal Murcogliano. I should just say his
YouTube channel is called what is going On with Shipping,
(24:50):
and he's providing really detailed updates of what's going on
with the ever forward, So if you're interested, you should
definitely check those out. So, Joe, I just have to
clarify one thing because our producer actually messaged me while
we were discussing, um, what's going on in the intro,
and he asked me if I'm joking about my stuff
being stuck on the ship. For total clarity, I am
(25:11):
not joking. There's a lot of nervous laughter here because
it is quite stressful to think that everything that I
have might be stuck on a ship that's you know,
there's a question mark over whether it's going to be
able to get off of its mud bank. But yes,
my stuff is actually on that ship. Yeah, this is
so crazy and so wild, and I'm like, I just
(25:31):
want to say, I'm thinking about making my entire identity
be one of repealing the Foreign Dredge Act of I
think that could be like a new like I might
make that my thing. It is like a really like
to learn, like we have a shortage of dredge capacity.
We have a shortage of tugboat capacity in the US.
(25:52):
So many interesting things I learned in that short period
of time. And I'm very sad that you don't have
your stuff from Hong Kong, but I'm selfishly happy that
this turned into such a illuminating discussion we get to
talk more about it. I would just say, you know,
I am now the face of structural under investment in
our ports and our tugboats and our dredges, and you know,
(26:15):
it's inconvenient not being able to sit on the couch
for over two months now. Um, I would like to
have a couch at some point. But I did also
think that Sala's point about what's going on with seafarers
is an important one because that has been two years
of a regulatory and logistical nightmare for people who are
(26:35):
actually working on ships, and especially in Asia. We heard
stories of people, you know, who had been stuck on
board and couldn't get home for months, if not more
than a year at a time. So definitely worth mentioning. Yeah,
we talked about the physical infrastructure a lot, but the
toll on the people actually keeping it going it is
obviously met. Yeah, all right, well, it looks like we
(26:58):
have a lot more to discuss on the shipping front,
and I'm sure we'll have some future episodes on this topic,
but for now, shall we leave it there? Let's leave
it there? All right? This has been another episode of
the All Thoughts podcast. I'm Tracy Alloway. You can follow
me on Twitter at Tracy Alloway and I'm Joe Why
Isn't All? You can follow me on Twitter at the Stalwart.
Follow our guest Sam Rcagliano. He's at marcagliano s. Also
(27:21):
definitely check out his YouTube's big thanks for our producers,
Magnus Hendrickson and Colin Tipton. Follow the Bloomberg head of podcast,
Francesca Levi at Francesca Today, and check out all of
our podcasts in Bloomberg under the handle at podcasts. Thanks
for listening.
Hosts And Creators
Joe Weisenthal
Tracy Alloway
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Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by Audiochuck Media Company.
The Brothers Ortiz
The Brothers Ortiz is the story of two brothers–both successful, but in very different ways. Gabe Ortiz becomes a third-highest ranking officer in all of Texas while his younger brother Larry climbs the ranks in Puro Tango Blast, a notorious Texas Prison gang. Gabe doesn’t know all the details of his brother’s nefarious dealings, and he’s made a point not to ask, to protect their relationship. But when Larry is murdered during a home invasion in a rented beach house, Gabe has no choice but to look into what happened that night. To solve Larry’s murder, Gabe, and the whole Ortiz family, must ask each other tough questions.