Containers lost at sea……. Hmmmmm, what does that mean..??

As part of global trade, in 2016, approximately 130 million containers packed with cargo with an estimated value of more than $4 trillion were shipped around the world..

Below interactive map from University College London’s Energy Institute and data visualisation firm Kiln shows the movements of more than 50,000 merchant ships on the high seas, moving goods and commodities all over the place..

With so many containers on the move in many different routes as displayed in this map, there are bound to be some containers lost at sea..

Even as recently as the 4th of March 2018, 76 containers were lost at sea when they fell off the container vessel Maersk Shanghai in North Carolina.. One of them has around 3 tons of Sulphuric Acid.. Maersk Shanghai is one of those mega ships with a capacity of 10,081 TEUs built in 2016..

So how often does this happen and how many containers are lost at sea..??

Previously there was no clear indication on how many containers were lost at sea and estimates varied greatly with speculative guesses putting the figure at around 10,000 containers lost at sea per year..

In order to ascertain the accurate number of containers lost at sea, the World Shipping Council (WSC) with the support of its member companies, undertook surveys in 2011, 2014 and 2017 for the preceding three years..

The survey results based on the inputs provided by the member companies of the WSC (representing about 80% of the global container vessel capacity), showed that during the nine year period (2008-2016) surveyed, on average 568 containers were lost at sea each year with an average total of 1,582 containers lost at sea each year including catastrophic events..

On average, 64% of containers lost at sea during the last decade were attributed to catastrophic events..

Catastrophic events refer to events such as

m.v.Rena that ran aground and broke up in 2011 off the coast of New Zealand resulting in around 900 containers lost at sea
m.v.MOL Comfort that broke in half and sank in the Indian Ocean in 2013 resulting in 5,578 containers lost at sea
m.v.EL Faro that sank after being hit by hurricane Joaquin enroute to Puerto Rico resulting in 391 containers lost at sea

There are several such incidents and instances where containers are lost at sea.. But as per the 2017 survey the good news is that the number of containers lost at sea is reducing..

Can containers just fall off a ship..??

No, containers do not just fall off a ship.. While a lot of containers may be lost at sea mainly due to weather conditions, several instances are man made, such as negligence, container weight misdeclaration, cutting corners to save costs, improper packing of cargo inside the containers, improper stowage planning etc..

Apart from weather conditions, Gard has identified that non-adherence or failure to comply with the ship’s Container Securing Manual (CSM) may be a more common cause of stack collapse..

Stack collapse on board a ship may happen due to the failure to comply with limits for stack or tier weights or stack heights stipulated in the ship’s CSM or due to the misdeclaration of container weights..

All it takes is just one container to start a stack collapse if not properly lashed..

Gard also notes that the CSM itself may not have catered for different stability conditions or the use of non-standard containers, such as high cubes..

Added to this, the sheer scale of the lashing arrangements required on Panamax or larger container ships poses quite a challenge for the ships crew to check against the CSM to ensure compliance..

The larger the ship, naturally the more lashing equipment is required and in some cases in the hope of reducing costs, some ships may cut corners with this.. But also be aware that such maintenance is not an easy task and incidents may also occur due to defective equipment..

Containers also don’t just fall off a ship.. There are a lot of incidents like the video below that happened last week (19th March) in Karachi which causes containers to fall off and be lost.. Notice in the second video how quickly the container goes down..

Containers lost at sea affects not just the shipping line, but it also affects the exporter, the importer, the trader, the consumer, not to mention the impact this has on the environment..

How can this be prevented..??

RESPONSIBILITY.. While nothing can be done against nature’s fury, preventing the loss of containers at sea (or on shore) is everyone’s responsibility and obligation specially in avoiding any man made disasters.. Everyone involved in the supply chain and maritime activities must take their roles seriously and ensure that they follow the proper processes and procedures set by IMO..

Initiatives such as IMO’s SOLAS VGM,  MARIN’s lashing@sea project, continue to provide guidance for shippers and container packers in terms of industry best practices and assist in preventing such incidents..

The shipping container turned 60 years in 2016 and every day the global trade is thankful for this invention.. However, we also need to thank the twistlock on a daily basis..

What is a twistlock..??

Well, all these containers don’t just stand in a neat stack all by themselves.. They are secured at their perforated steel corner castings with a connector called a twistlock.. The idea of using twistlocks to secure stacks of container was quite straightforward, but the process of creating a standardized connector that would work on containers anywhere in the world wasn’t easy as per Quartz Africa..

In the mid-20th century, shipping lines, trucking companies, and railway operators all competed to have their models adopted as the standard.. According to Marc Levinson’s history of containerization, The Box, it took a radical act to break the deadlock: In January 1963, McLean directed his company, Sea-Land, to release its patent rights to the design of its containers’ corner castings..

Giving away the design reduced McLean’s potential gain in the near term but allowed the bickering parties to converge on a single model, resulting in a far richer ultimate prize: an efficient, uniform, international system..

So what does one do when containers are lost at sea..??

First and foremost

Catastrophic events such as above may bring in Average adjusters who may be called in if the shipping line declares General Average..

If your cargo is sufficiently covered by cargo insurance, generally, you should have nothing to worry about especially if the containers were lost at sea due to weather conditions.. There will of course be delays in your claims being settled given the circumstances..

By sufficiently covered by cargo insurance I mean if you are covered by any of the A,B, or C clauses published by the Lloyd’s Market Association (LMA) and International Underwriting Association of London (IUA)..

C Clauses – Risks covered

1.1        loss of or damage to the subject-matter insured reasonably attributable to1.1.1     fire or explosion1.1.2     vessel or craft being stranded grounded sunk or capsized1.1.3     overturning or derailment of land conveyance1.1.4     collision or contact of vessel craft or conveyance with any external object other than water1.1.5     discharge of cargo at a port of distress1.2        loss of or damage to the subject-matter insured caused by1.2.1     general average sacrifice1.2.2     jettison

B Clauses – Risks covered

All the above plus:

1.2        loss of or damage to the subject-matter insured caused by1.2.1     general average sacrifice1.2.2     jettison or washing overboard1.2.3     entry of sea lake or river water into vessel craft hold conveyance container or place of storage1.3        total loss of any package lost overboard or dropped whilst loading on to, or unloading from, vessel or craft.

A Clauses – Risks covered

All risks are covered.

Just remember that “All risks” are not “All Risks” in that there has to have been a happening..  Something has to have happened that was NOT EXPECTED..

All the clauses covers general average plus “Both to Blame” collisions in case where containers were lost at sea due to collision of two ships like in the case of CHONGLUNJ3010 and NEW SAILING 2..

But also watch out for exclusions which are clearly spelt out in clauses 4, 5, 6 and 7 in the clauses..

Well apart from keeping calm and notifying your insurance, you also need to have proper communication with your customer(s) and any other stakeholders in your business in terms of what has happened, how it may affect your business, cash flow, inventory, assembly line etc etc so that you can mitigate against some of the risks..

You can imagine if a few of the containers lost at sea contained some critical components for an automotive assembly plant which could come to a standstill due to lack of products to assemble.. Or an entire family can be left destitute with nothing if they have just relocated to a new country and all their worldly possessions were lost..

But anyway all is not doom and gloom..

While to the trade, it might be a bit upsetting, containers lost at sea may in some cases be good for the creatures of the deep sea.. While containers lost at sea may disrupt the natural system, it seems the marine life can adapt to it..

Huffington Post reported in 2014 that researchers at the Monterey Bay Aquarium Research Institute (MBARI) have been studying one of 24 containers lost from the vessel, Med Taipei, in a 2004 storm, for ten years..

As per the study, the physical presence of the container provided a surface that immobile animals, such as barnacles, could latch on to, an elevated place from which predators could hunt and it affected the currents at the floor, as well as the types of animals that live in them..

It also turns out that the hard surface of the container, which may not have degraded due to the near-freezing water temperatures some 4,200 feet down, provided a reef-like structure for tubeworms, snails, tunicates and scallops, but not sponges or corals, which are found on natural reefs nearby..

The researchers are not sure why this is so, but they speculate that it might be because the corals just haven’t had enough time to colonize the container’s surface, or the container was coated in some corrosion-resistant chemical that discouraged them from living there..

The container apparently acted as an artificial reef and marine life was drawn to it because it provided a place to hide from predators..

If you have had any containers lost at sea, I would be interested to hear what happened and how you handled it.. Do share..

Source Link | Shipping and Freight Resource