The Bigger the Ship, the Riskier
Container ship safety is under the spotlight with ever-increasing ship sizes, as evidenced by the January 2015 inauguration of the world’s largest container ship, the MSC Oscar (19,224 teu).
The length of four football pitches, it can carry 19,000 containers. Yet ships as large as 22,000 teu are expected to be in service soon. Experts in this field say that losing bigger ships could cost $1bn each.
Dr. Sven Gerhard, Global Product Leader Hull & Marine Liabilities of Alliance Marine Risk Consulting, Allianz Global Corporate & Specialty (AGCS) says: “Larger ships can also mean larger losses. The industry should prepare for a loss exceeding $1 billion in future featuring a container vessel or even a specialized floating offshore facility.”
Maximum exposure would not necessarily be limited to vessel and cargo value but could also include environmental or business interruption backlash. This raises concerns about whether risk management needs reviewing after an 80%+ container ship capacity increase in a decade.
For these so-called “mega-ships”, AGCS has identified a number of risks including the fact operation is limited to a small number of deep water ports, meaning an increased concentration of risk. There is also a world-wide shortage of qualified seaman.
Other risk factors associated with these larger ships include a shortage qualified seaman and the complexity of salvage and removal, as was the case with the wreck removal of the Costa Concordia.
As the wreck removal of the Costa Concordia passenger ship demonstrated such costs can easily be a multiple of the hull value. “The shipping industry should think long and hard before making the leap to the next ship size,” adds Captain Rahul Khanna, Global Head of Marine Risk Consulting, AGCS.
