Shipowners with large vessels have their own sets of risks to contend with
Allianz Global Corporate & Specialty’s (AGCS) Safety and Shipping Review 2021 warned of the risks involving large vessels. Ever Given’s grounding incident underscored the perils involving large cargo vessels, and this was just one of the instances.
Dilemma with large vessels
While large vessels are in good stead from economies of scale and fuel efficiency standpoints, the risks and damages can be equally substantial. Despite the prevalent dilemmas including COVID-19, China and Korea are actively taking on newbuilding orders for large cargo vessels.
Large vessel owners have their own set of issues to deal with in the event of mishaps – which also involves more costs and complex operations. More complex equipment is needed to respond to incidents. Referencing the Suez Canal fiasco in March 2021, one could imagine the lengthy process of transferring the cargo to another for delivery – if the mammoth vessel was not freed. That is apart from contending with the traffic jam which lasted a week, leaving fleets in queue and froze supply chains.
Manmade mishaps in large vessels
In 2019, Korean owned Golden Ray tipped on her side off St. Simons Island shoreline while carrying more than 400 vehicles. A public hearing last September suggested improper loading which resulted in instability caused the mishap. Additionally, it was revealed that the 656ft ship could have avoided capsizing by filling the ballast tanks for stability before leaving the Port of Brunswick. AGCS also noted the wreck removal of Golden Ray cost several hundreds of millions of dollars, and the process took more than a year.
AGCS also observed an increase in fires onboard in the recent years. There were 40 cargo related fires, or one every 10 days in 2019. Though the number declined slightly in 2020, it was still above average. Vessel size has a direct correlation to the potential size of loss. Car transporters/RoRo and large container vessels are at higher risks with the potential for greater consequences should one break out.
Fires can be caused by non-declaration or misstating of hazardous cargo, such as self-igniting charcoal, chemicals and batteries. It can lead to improper packing and stowed onboard, which may result in ignition and/or complicate detection and firefighting. The other contributing factor is the fire detection and fighting capabilities relative to the size of the vessel. An International Union of Marine Insurance working group on ship fire safety is drawing up some recommendations to the International Maritime Organisation (IMO) in respect of improved fire detection and firefighting capabilities onboard cargo ships. Therefore, banking solely on economies of scale based on vessel size may not always be a wise option. Marine Online has an extensive list of smaller vessels available for chartering at 0%, and at much lesser risks.
Marine Online News Team
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