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The demand for cargo transportation is growing, but not all containers will reach from point A to point B

The shipping industry faced the largest container losses in seven years. Last year, more than 3,000 containers ended up at sea, and in 2021, more than 1,000 containers fell overboard. Incidents like these disrupt supply chains for hundreds of US retailers and manufacturers such as Amazon and Tesla.

The sudden rise in the number of incidents is due to many reasons. The weather is becoming more unpredictable and the ships are getting larger, which allows containers to be set higher than before. At the same time, the situation was complicated by the surge in e-commerce amid the explosive growth in consumer demand during the pandemic. And this has increased the need to deliver goods as quickly as possible.

“Containers are moving more frequently and therefore these huge container ships are now much closer to full load levels than before,” said Clive Reed, founder of Reed Marine Maritime Casualty Management Consultancy. “There is commercial pressure on ships: they are required to arrive on time and therefore make more voyages.”

After the One Apus container ship hit a heavy storm in November and lost more than 1,800 containers, footage has surfaced of thousands of steel containers scattered on board like Lego pieces, some of which have turned into metal wreckage. The incident became the most serious since 2013, when the MOL Comfort container ship broke in two and sank in the Indian Ocean with all its cargo – 4,293 containers.

In January, the cargo ship Maersk Essen lost approximately 750 containers en route from the Chinese port of Xiamen to Los Angeles. A month later, 260 containers fell from the Maersk Eindhoven due to engine shutdown in difficult weather conditions.

Hazardous conditions

According to transportation experts, the rush creates dangerous conditions that could lead to disaster. For example, dock handlers may not properly secure containers on top of each other, or captains may decide to sail in a storm to save fuel and time as they are under pressure from charterers. One wrong move can put both cargo and crew at risk.

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The likelihood of accidents is increasing as conditions for already tired sailors deteriorate during the pandemic. Allianz Global Corporate & Specialty estimates that at least three quarters of accidents and deaths in the shipping industry are due to human error.

Nearly all recent incidents have occurred in the Pacific Ocean, the region with the busiest traffic and strongest storms. The shipping route connecting the Asian economy with North American consumers was the most profitable for shipping companies last year. Exports from China are on the rise as the pandemic is fueling demand for the goods people need at home to work, study and play.

Flights have always been difficult, but they have become even more dangerous due to changing weather conditions. The increase in traffic from China to the United States last winter coincided with the strongest winds in the North Pacific since 1948, increasing the likelihood of storms, said Todd Crawford, chief meteorologist at The Weather Company.

With 226 million containers shipped each year, losing 1,000 of them or more may seem like a drop in the ocean.

“This is a very small percentage of losses,” said Jacob Damgaard, Deputy Director of Loss Prevention at Britannia P&I at a conference in Singapore on April 23rd. “But that’s almost 60% of the monetary value of all container incidents.”

Jai Sharma, a partner at the maritime law firm Clyde & Co., estimates that the One Apus container ship alone lost an average of $ 50,000 per container, the highest in modern history. According to Bloomberg data, this year’s losses were estimated at $ 54.5 million.

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Industry pressure

The blockage of the Suez Canal by the 400-meter vessel Ever Given, which ran aground while passing through the canal, has highlighted the vulnerability of the shipping industry. One of the largest container ships in the world blocked movement on the vital waterway for almost a week, and the consequences of this incident on world trade are still felt.

So far, none of the recent container accidents have been directly related to security breaches. The International Maritime Organization said it was awaiting the results of an investigation into the latest incidents and warned that it would not draw any conclusions until then.

However, many experts believe that the situation has become more dangerous due to pressure on supply chains in the aftermath of the pandemic. When ships approach areas with difficult weather conditions, captains can evade danger. But according to Jonathan Ranger, head of the American International Group Inc. in the Asia-Pacific region, now the principle is “no need to try to get around the storm, you need to swim further.”

“And if, in theory, you add to this the poorly maintained pivot clamps and cables needed to secure these containers, it could lead to an accident,” he added at an industry conference in Singapore.

With the containers being installed higher and higher, the vessel can become more unstable during a storm: under the influence of the waves, the vessel can roll at steep angles, putting stress on the fastening of the containers. The situation is further complicated if the struts are outweighed at the top. This can happen when the weight is incorrect on the container bills of lading, which many in the industry believe is all too common.

“You can’t look into containers,” said Captain Arnaldo B. Romero, who sailed from Japan to South America at the end of last year. “Therefore, if the load is heavy and the load planning officer sets it high, then we can lose control during the roll.”

The risks are also exacerbated by the workload of the crew. According to Neil Wiggins, Managing Director of Independent Vessel Operations Services Ltd, the reduction in crew as the number of containers on deck increases makes it difficult to inspect every bracket and propeller properly.

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The health and safety of seafarers is also at risk. The overturning of several tiers of 40-foot containers during a storm is one of the worst experiences for the captain and crew. According to Philip Istell, founder of Container Shipping Supporting Seafarers, PTSD is common among crew members.

The issue needs to be resolved

“Moving at sea is different than it was 10 years ago,” said Rajesh Unni, founder of Synergy Marine Group, which provides services to shipowners. – What are we doing to make the industry adapt? It’s easy to blame the captain, but we need to see how to change the port infrastructure, the routes of the ships. “

The International Maritime Organization, which is the UN’s specialized agency responsible for shipping regulations, states that the countries whose flags ships sail are responsible for issuing ship safety certificates, and that ports that call in are responsible for enforcing container loading regulations.

According to the Organization, its Subcommittee on Transport of Goods regularly examines problems related to the transport of containers and has scheduled its next meeting in September.

Jonathan Ranger of AIG says companies need to be prepared to get around the storm and handle ships properly: “These ships are designed to carry containers, and such a loss, I’m not afraid to say it, is unacceptable.”

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