# News that makes you say WTF?!?! **URL:** \ **Category:** General\ **Created:** [March 24, 2021, 7:35pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422 "2021-03-24T19:35:11Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![1695814](https://community.goactuary.com/user_avatar/community.goactuary.com/1695814/32/38506_2.png) [@1695814](https://community.goactuary.com/u/1695814)\ **Post date:** [March 29, 2021, 8:51pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/21 "2021-03-29T20:51:01Z")
Yup…via wsj… ### [Ship Stuck in the Suez Canal Is Freed](https://www.wsj.com/articles/ship-blocking-suez-canal-is-partially-freed-11616989503?mod=hp_lead_pos5) > [@](#): > > The vast container ship that was blocking the canal for six days has been freed and is moving north to an anchor point, the Suez Canal Authority said, paving the way to open the critical waterway and ease days of global supply delays. > [@](#): > > delays to shipping could last weeks > [@](#): > > People involved in the investigation, still in its initial stages, have said it is focusing on a sandstorm and a roughly two-minute burst of wind that likely threw the vessel inexorably off course. On my phone, from ALJAZEERA… > [@](#): > > “There have been no reports of pollution or cargo damage and initial investigations rule out any mechanical or engine failure…” said Bernhard Schulte Shipmanagement (BSM) ---
**Author:** ![Kenny](https://community.goactuary.com/user_avatar/community.goactuary.com/kenny/32/53_2.png) [@Kenny](https://community.goactuary.com/u/Kenny)\ **Post date:** [March 29, 2021, 9:38pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/22 "2021-03-29T21:38:14Z")
So is this a case of “I bet you can’t go through the Suez Canal sideways.” “Hold my beer!”? ---
**Author:** ![Actuary321](https://community.goactuary.com/letter_avatar_proxy/v4/letter/a/ed8c4c/32.png) [@Actuary321](https://community.goactuary.com/u/Actuary321)\ **Post date:** [March 29, 2021, 9:57pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/23 "2021-03-29T21:57:47Z")
Brad Thor linked an article about the 3 Russian Navy submarines smashing through the Arctic ice saying Scot Harvath was monitoring this situation closely. Someone linked a story about the Suez Canal clog and he said it gets a mention. ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [March 30, 2021, 4:20am UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/24 "2021-03-30T04:20:15Z")
> [@BG5150](#): > > about 50 Which is a lot of the total number of container ships en route at any given time. Still, maybe I should have said that a crazy amount of cargo goes through the Suez Canal. US News & World Report says 10% of “trade”… I’m not sure what that means. 10% of cargo? They also mentioned 7% of oil. So it’s a lot. Apparently Egypt is claiming they lost $12-$15 million _per day_ that the canal was closed. [https://www.usnews.com/news/business/articles/2021-03-29/suez-canal-blockage-adds-to-pressure-points-in-global-trade](https://www.usnews.com/news/business/articles/2021-03-29/suez-canal-blockage-adds-to-pressure-points-in-global-trade) ---
**Author:** ![NormalDan](https://community.goactuary.com/user_avatar/community.goactuary.com/normaldan/32/1013_2.png) [@NormalDan](https://community.goactuary.com/u/NormalDan)\ **Post date:** [March 30, 2021, 1:16pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/25 "2021-03-30T13:16:02Z")
> [@twig93](#): > > Apparently Egypt is claiming they lost $12-$15 million _per day_ that the canal was closed. I wonder if they had insurance ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [March 30, 2021, 1:18pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/26 "2021-03-30T13:18:54Z")
I think that the owner of the ship is legally liable. They’ll probably go bankrupt and then Egypt and all of the shipping companies that lost money will get a share of whatever assets they have. I’ll see if I can find the article where I read that. ---
**Author:** ![NormalDan](https://community.goactuary.com/user_avatar/community.goactuary.com/normaldan/32/1013_2.png) [@NormalDan](https://community.goactuary.com/u/NormalDan)\ **Post date:** [March 30, 2021, 1:21pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/27 "2021-03-30T13:21:22Z")
Makes sense, although aren’t some of those shipping firms massive? I wonder if marine cargo covers this sort of loss? ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [March 30, 2021, 1:33pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/28 "2021-03-30T13:33:35Z")
I’m guessing that any damage to the ship (little to none, I think) and possibly its own shipping delays are covered. Whether there is liability coverage for shipping delays for hundreds of other ships and the lost Suez Canal fees and the extra time / fuel for the ships that opted to sail around Africa instead of waiting it out is a different question. And of course ordinary Joe’s like you and me who must pay more for gas and probably other goods too… we won’t get a dime. ---
**Author:** ![DeepPurple](https://community.goactuary.com/user_avatar/community.goactuary.com/deeppurple/32/1551_2.png) [@DeepPurple](https://community.goactuary.com/u/DeepPurple)\ **Post date:** [March 30, 2021, 3:04pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/29 "2021-03-30T15:04:48Z")
> [@Actuary321](#): > > So it seems they have refloated the boat. I heard it was costing the world economy $400 million per hour. WOW. > [@twig93](#): > > Apparently Egypt is claiming they lost $12-$15 million _per day_ that the canal was closed. I have been researching a lot about the financial impact and a LOT of information has been reported badly, greatly exaggerating the real impact. The $15million per day is a real good estimate of the daily value that Egypt collects as operators of the canal. I read that Egypt collects 5.6B annually, which totally hangs together with the 15M per day estimate. With the canal blocked, I assume that the collection of “tolls” came to a halt. But reports are that the canal averages 50 transits per day but can run at a capacity of 106 transits per day means that the back log of ships that are sitting outside the canal will be cleared in a week or two as the canal catches up running at high capacity. Now, some of the ships decided to go around Africa rather than wait out the arterial blockage. Egypt will presumably lose revenue from those few ships. But Egypt will be collecting $30M per day for the next few weeks as it catches up on the transit backlog. So how much did it lose? It seems the answer is not too much. The 400M per day number is a misreported, absurd number. An average of $400 million of cargo transits the canal per hour. That cargo, totaling billions , will be delayed to its destination. That doesn’t mean that the “world economy” is losing the value of the goods. No doubt a small fraction of the cargo that is time sensitive may be lost, such as livestock, but most of the cargo will reach its destination up to two weeks late. If you order a $1000 TV on Amazon that arrives a week late, you may be inconvenienced, but you havn’t lost $1000. ---
**Author:** ![Mathman](https://community.goactuary.com/user_avatar/community.goactuary.com/mathman/32/14042_2.png) [@Mathman](https://community.goactuary.com/u/Mathman)\ **Post date:** [March 30, 2021, 3:23pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/31 "2021-03-30T15:23:27Z")
> [@DeepPurple](#): > > Now, some of the ships decided to go around Africa rather than wait out the arterial blockage. Egypt will presumably lose revenue from those few ships. But Egypt will be collecting $30M per day for the next few weeks as it catches up on the transit backlog. So how much did it lose? It seems the answer is not too much. There will be some catch-up, but if a boat got delayed by a week, that boat is going to make perhaps one fewer trip through the canal in 2021. So the loss would be the number of boats that went around Africa plus the number of fewer trips that get made due to delays. I’m picking nits, I agree with your larger point that the press ran with ‘this is costing a quadrillion dollars,’ when the reality is it’s much smaller. ---
**Author:** ![dr\_t\_non-fan](https://community.goactuary.com/letter_avatar_proxy/v4/letter/d/a8b319/32.png) [@dr\_t\_non-fan](https://community.goactuary.com/u/dr_t_non-fan)\ **Post date:** [March 30, 2021, 3:55pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/32 "2021-03-30T15:55:51Z")
It’s delayed economy, not completely lost economy. ---
**Author:** ![DeepPurple](https://community.goactuary.com/user_avatar/community.goactuary.com/deeppurple/32/1551_2.png) [@DeepPurple](https://community.goactuary.com/u/DeepPurple)\ **Post date:** [March 30, 2021, 4:49pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/33 "2021-03-30T16:49:19Z")
This article, in Business Insurance, pegs the shipping industry loss at 24M for the incident (not including whatever was spend on digging and tugboats). That’s 10,000 to $15,000 per day times somewhere between 260 and 400 ships sitting idle outside the canal for 1 to 7 days each. That’s a far, far cry from 400M per hour. [https://www.businessinsurance.com/article/20210329/NEWS06/912340770/Suez-chaos-leaves-shipping-firms-counting-‘lost-expenses’-cost](https://www.businessinsurance.com/article/20210329/NEWS06/912340770/Suez-chaos-leaves-shipping-firms-counting-%E2%80%98lost-expenses%E2%80%99-cost) ---
**Author:** ![BG5150](https://community.goactuary.com/user_avatar/community.goactuary.com/bg5150/32/38521_2.png) [@BG5150](https://community.goactuary.com/u/BG5150)\ **Post date:** [March 30, 2021, 5:51pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/34 "2021-03-30T17:51:24Z")
> [@DeepPurple](#): > > But Egypt will be collecting $30M per day for the next few weeks as it catches up on the transit backlog. So how much did it lose? It seems the answer is not too much. Time value of money. ---
**Author:** ![Mathman](https://community.goactuary.com/user_avatar/community.goactuary.com/mathman/32/14042_2.png) [@Mathman](https://community.goactuary.com/u/Mathman)\ **Post date:** [March 30, 2021, 6:56pm UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/35 "2021-03-30T18:56:36Z")
With short-term interest rates being negative, this is a win! ---
**Author:** ![Lucy](https://community.goactuary.com/user_avatar/community.goactuary.com/lucy/32/8802_2.png) [@Lucy](https://community.goactuary.com/u/Lucy)\ **Post date:** [March 31, 2021, 3:25am UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/36 "2021-03-31T03:25:43Z")
Who is liable for the various costs? ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [March 31, 2021, 3:45am UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/37 "2021-03-31T03:45:54Z")
From what I read, the Japanese company that owns the ship is the one legally liable for pretty much everything. (Extrication costs, any damages the Suez Canal suffered, and lawsuits from other affected shipping companies.) But how various possible insurance coverages may come into play, and who those insurers are… I have no idea. Apparently they have $13 billion of liability coverage. So the lawsuits will drag out for years as everyone claims their share of that $13 billion. And then the owner might be able to go after the operator… it’ll be a mess. Here’s one article I’ve seen on the topic: > **[With ship now freed, a probe into Suez Canal blockage begins](https://www.kktv.com/2021/03/30/with-ship-now-freed-a-probe-into-suez-canal-blockage-begins/)** > > When blame gets assigned, it could turn into years of litigation over the costs of repairing the ship, fixing the canal and reimbursing those who saw their cargo shipments disrupted. ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [March 31, 2021, 4:04am UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/38 "2021-03-31T04:04:57Z")
From The NY Times: > [@](#): > > A Taiwanese company operates the quarter-mile-long Ever Given. An Indian crew staffs it. A Panamanian flag flies over it. And Dutch and Egyptian salvagers helped pull it from the shallows of the Suez Canal where the vessel was beached for nearly a week. > > But it was Japan’s largest shipbuilder that constructed the vessel and owns it — and will most likely bear the enormous cost of the disruption it caused. > > The Ever Given, part of the Taiwanese-based Evergreen Line, is owned by a subsidiary of Imabari Shipbuilder, a private company founded in 1901 and based in Ehime, on Japan’s southern island of Shikoku. The subsidiary, Shoei Kisen Kaisha Ltd., founded in 1962, has a client base that includes companies in Belgium, Hong Kong, Singapore and Taiwan. > > Yukito Higaki, the president of Imabari, expressed confidence last Friday that the Ever Given would be refloated by the weekend, a prediction that proved somewhat optimistic. > > In an interview with the Ehime Shimbun, a local newspaper, Mr. Higaki also said the subsidiary was “likely to bear the cost” of salvage and repair. > > Those costs have yet to be determined. [https://www.nytimes.com/live/2021/03/29/world/suez-canal-stuck-ship](https://www.nytimes.com/live/2021/03/29/world/suez-canal-stuck-ship) ---
**Author:** ![Lucy](https://community.goactuary.com/user_avatar/community.goactuary.com/lucy/32/8802_2.png) [@Lucy](https://community.goactuary.com/u/Lucy)\ **Post date:** [March 31, 2021, 10:25am UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/39 "2021-03-31T10:25:09Z")
> [@twig93](#): > > And then the owner might be able to go after the operator… it’ll be a mess. You can’t get blood from a stone. The captain may be responsible, but he’s not going to pay a ton of damages. > [@twig93](#): > > But how various possible insurance coverages may come into play, and who those insurers are… I have no idea. Apparently they have $13 billion of liability coverage. So the lawsuits will drag out for years as everyone claims their share of that $13 billion. Well, i bet it will be settled faster than the world trade center bombing. The lawsuit regarding whether it was one or two events (with one or two deductables, etc.) took more than a decade… The way high levels of coverage are reinsured, pretty much every carrier that is in the business at all will end up with a slice of this pie. Probably several will have (partially) reinsured their own coverage. ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [March 31, 2021, 11:10am UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/40 "2021-03-31T11:10:03Z")
> [@Lucy](#): > > The captain may be responsible, but he’s not going to pay a ton of damages. I don’t mean the captain. I mean the Japanese shipbuilder that owns the boat may go after the Taiwanese freight/shipping company that operates the boat. If there was human error involved then it would most likely be the operator who hired the humans who were at fault. (Unless one or both pilots were the only humans to make the error(s). It sounds like the Suez Canal Authority is fairly well shielded from legal liability.) The crew are mostly Indian. I don’t imagine there is all that much to go after there, although I suppose the captain probably makes pretty good money at least by Indian standards. Whether it’s enough to bother going after when the USD losses are likely in the 11 digit range… eh, probably not worth the legal expense. At most you’ll get several hundred thousand from him… at most. But someone may try, particularly if he’s found to have erred. There’s going to be no shortage of plaintiffs seeking damages, that’s for sure. ---
**Author:** ![twig93](https://community.goactuary.com/user_avatar/community.goactuary.com/twig93/32/527_2.png) [@twig93](https://community.goactuary.com/u/twig93)\ **Post date:** [March 31, 2021, 11:40am UTC](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422/41 "2021-03-31T11:40:05Z")
> [@Lucy](#): > > Well, i bet it will be settled faster than the world trade center bombing. The lawsuit regarding whether it was one or two events (with one or two deductables, etc.) took more than a decade… How did that shake out? I would think that where it was a coordinated event it would count as one, but I suppose that the insurers wanted two. I’m not sure about the “faster” part though. Japanese owner, Taiwanese operator, Panamanian flag, Indian crew, Egyptian pilots, plaintiffs from basically everywhere… it might take a decade just to decide which court(s) have jurisdiction > [@](#): > > The way high levels of coverage are reinsured, pretty much every carrier that is in the business at all will end up with a slice of this pie. Probably several will have (partially) reinsured their own coverage. Yeah, I assume this is true. And I know sometimes insurers can wind up with a bigger slice of the pie than they intended if it turns out that through various reinsurance/retrocession agreements they have what turns out to be multiple slices of the same pie. I know life insurers are notoriously bad about keeping track of that sort of thing. (We don’t want to retain more than $X on any one life… but we have $X for Bob on policy 1 then another $X for Bob on policy 2, then we have $0.5X for Bob on a third policy that’s in a block of business we bought from another carrier two decades ago, then we reinsure Bob’s group policy for another $0.9X, and Bob’s wife bought spouse coverage for Bob for another $50,000… crap we’re actually covering Bob for $3.4X + $50.000 when we’re not supposed to have more than $X of exposure on anyone.) [Previous page](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422.md?page=1) [Next page](https://community.goactuary.com/t/news-that-makes-you-say-wtf/2422.md?page=3)