Container ship sizes need rethink
Economies of scale are driving ever-bigger ship sizes but should that outweigh the expected soaring insurance costs from inevitable mega ship losses and disruption to JIT deliveries?
Already, 20,000+ TEU ship sizes are in the pipeline, but container losses at sea show no signs of moderating. The latest disastrous loss is the ONE Apus which lost 1,816 TEUs after hitting rough weather on November 30 1,600 nautical miles north-west of Hawaii on a voyage from China to Long Beach, California. The ship is a 14,000 TEU vessel built only last year and operating under the Japanese flag. It looks like the worst container loss in container shipping history and comes only one month after another ONE Line -operated ship of similar capacity, the ONE Aquila, also suffered collapsed containers in severe weather on a similar voyage.
There are many reasons that contribute towards such losses as sea, including poor internal packing and load distribution and deliberate under-declaring of cargo weights to save costs and freight duties. When, for example, the MSC Napoli container ship was beached on the English Devon coast in 2007 MAIB found that one of the contributing causes for the total hull write off was overloading of 20% of the containers, including one by as much as 3 tonnes.
The IMO has toughened weighment rules to reduce such nefarious under declarations but there are still supply chain gaps and loopholes in weighing containers. If insurance companies do not call a halt on behemoth ships soon they will only have themselves to blame for the inevitable, multi-billion pound losses ahead. Meanwhile, if you are reliant on JIT container arrivals check if any insurance covers for you business disruption losses.
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