The first point is, why do shipping companies launch newer and bigger ships in the water? Letโs 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.
Evolution
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 ๐ฎ๐ฐ๐ฐ๐๐บ๐๐น๐ฎ๐๐ถ๐ผ๐ป ๐ผ๐ณ ๐ฐ๐ฎ๐ฟ๐ด๐ผ, 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.
๐ง๐ต๐ฒ ๐ถ๐บ๐ฝ๐ฎ๐ฐ๐ ๐ผ๐ป ๐๐ต๐ฒ ๐ฒ๐ป๐๐ถ๐ฟ๐ผ๐ป๐บ๐ฒ๐ป๐. 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 ๐ฑ๐ถ๐๐ฟ๐๐ฝ๐ ๐๐๐ฝ๐ฝ๐น๐ ๐ฐ๐ต๐ฎ๐ถ๐ป๐ for retailers and manufacturers, bringing congestion and delays.
For ๐ฝ๐ผ๐ฟ๐๐ ๐ฎ๐ป๐ฑ ๐๐ฒ๐ฟ๐บ๐ถ๐ป๐ฎ๐น ๐ผ๐ฝ๐ฒ๐ฟ๐ฎ๐๐ผ๐ฟ๐, ๐ฐ๐ฎ๐ป๐ฎ๐น๐ 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 ๐ณ๐ถ๐ฟ๐ฒ๐ on board container ships has increased significantly in recent years. More ๐ฒ๐
๐๐ฟ๐ฒ๐บ๐ฒ ๐๐ฒ๐ฎ๐๐ต๐ฒ๐ฟ 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.
ย
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.
