The first point is, why do shipping companies launch newer and bigger ships in the water? Let’s put together some of their arguments in order to justify such engineering feats:
- Improving efficiency in relation to fuel energy can help to reduce transportation/shipping costs.
- The desire to achieve scale economies. Although the overall cost of the vessel is higher, the cost per unit is in fact lower.
- To reduce vessel Greenhouse Gas and the supply chains impact upon the environment.
- To maximize their capacity due to an increase in the number of ship orders.
- Reductions in vessel construction costs.
- To adapt to layout infrastructure at hub ports, optimizing and streamlining of vessel and land-based logistics.
In 1968, the container ship Encounter Bay was 1,530 tonnes. In 2022, Ever Alot is considered the biggest cargo ship with a maximum TEU of 24,004. The size of the largest container ships has almost tripled within the last two decades.
Secondly, what are the biggest risks associated with large container ships?
Higher 𝗮𝗰𝗰𝘂𝗺𝘂𝗹𝗮𝘁𝗶𝗼𝗻 𝗼𝗳 𝗰𝗮𝗿𝗴𝗼, higher losses. As a large amount of cargo is exposed if a major casualty does occur, the number of containers involved has a direct correlation to the potential cost of claims and salvage process.
𝗧𝗵𝗲 𝗶𝗺𝗽𝗮𝗰𝘁 𝗼𝗻 𝘁𝗵𝗲 𝗲𝗻𝘃𝗶𝗿𝗼𝗻𝗺𝗲𝗻𝘁. The size of vessels is contributing to a growing number of containers lost at sea, which negatively affects the marine environment.
Incidents involving large container ships might 𝗱𝗶𝘀𝗿𝘂𝗽𝘁 𝘀𝘂𝗽𝗽𝗹𝘆 𝗰𝗵𝗮𝗶𝗻𝘀 for retailers and manufacturers, bringing congestion and delays.
For 𝗽𝗼𝗿𝘁𝘀 𝗮𝗻𝗱 𝘁𝗲𝗿𝗺𝗶𝗻𝗮𝗹 𝗼𝗽𝗲𝗿𝗮𝘁𝗼𝗿𝘀, 𝗰𝗮𝗻𝗮𝗹𝘀 and logistic infrastructure, it is an immense challenge. As demonstrated by the Ever Given, ever increasing vessel sizes continue to pose a disproportionately large risk with costly groundings. Port facilities and salvage equipment is not always as sophisticated or available as it should be, while salvage and wreck removal is more expensive and often still ventures into uncharted territory.
Although in some ways current vessels are safer, the number of 𝗳𝗶𝗿𝗲𝘀 on board container ships has increased significantly in recent years. More 𝗲𝘅𝘁𝗿𝗲𝗺𝗲 𝘄𝗲𝗮𝘁𝗵𝗲𝗿 and a surge in freight rates and incorrect cargo weights could all be at play in increasing the overall risk of shipping cargo via containerized ocean freight.
Very large vessels present some unique risks. Our advice for insurance companies and brokers is as follows. Improving the risk management associated with large vessels as well as being aware of all potential costs and financial implications. Knowing the possibility of recovery and salvage is also crucial in any given situation.