Shippers cry foul as competition regulators ignore consortia
Measures used to calculate the concentration and market shares of shipping lines fail to take ...
Shippers have welcomed the World Shipping Council (WSC)’s move to increase its carrier surveys on container losses to annual events rather than tri-annual surveys.
This follows concerns over particularly heavy container losses from around the autumn of 2020 to spring 2021.
According to the WSC’s latest figures, some 3,113 containers were lost in the 2020-2021 period, a 400% increase on the losses during the two previous years, prompting the increase in the reporting period from every three years to annually.
James Hookham, director at the Global Shippers’ Forum (GSF), told The Loadstar: “Every box not delivered has a disappointed customer and consignee, and importantly it means there is freight either washing up on beaches or becoming a danger to shipping.”
While Mr Hookham pointed to PPE cargo that washed up on Australian beaches following the APL England losses in May 2020, he said there must also be considerations of the environmental damage that can be caused, as with the X-Press Pearl off the coast of Sri Lanka a year ago, or the Zim Kingston, outside Vancouver in November.
A point that the WSC accepts, saying it considers “every lost container overboard is one too many”.
The WSC is correct to point out the small number of containers lost by comparison to the 241m containers shipped annually, less than one-thousandth, many of these boxes would have been carrying high-value cargo, while the clean-up and environmental costs will not be included in the calculations for the lost freight.
Estimates vary as to the value of losses, a ‘back of the envelope’ calculation, using the industry accepted norm of $40,000 per box for cargo value, would add up to $124.5m. Mr Hookham calculates that the 241m boxes with $4tn of cargo cited by the WSC gives an average cargo value of around $16,500, but with half the containers empty, a more accurate calculation would be about $33,000. A total value of around $52m.
However, the most likely losses are loaded boxes, which would be heavier and move with more force when a ship rolls, so the probable value is probably somewhere between the two. But even the lower figure is significant, and the WSC told The Loadstar it was not downplaying the losses.
Shippers, meanwhile, are concerned that, while the WSC has conducted its tri-annual surveys since 2011, “with the express intention to focus the attention on what all actors in the supply chain together with regulators can do to prevent losses,” according to the carriers.
According to WSC: “The responsibility for container safety is shared across the supply chain and every day carriers work with shippers, packers, freight forwarders, terminal operators, and importers to enhance safety. To prevent container losses, it is crucial that cargo is safely and securely packed, declared and placarded in line with applicable rules and regulations (the IMDG Code) and the guidance set out in the CTU Code.”
In an effort to create a cross-industry response to container losses the Cargo Integrity Group – of which the GSF and WSC are founding members – have developed a short CTU Code Guide and a practical Checklist to make the information in the CTU Code more accessible and easier to use for all parties in the supply chain.
Moreover, the Marin TopTier investigation into container ship losses has been running since September 2020, the average losses have remained very similar, apart from two major spikes.
For Mr Hookham, this raises two questions: has there been any new guidance to carriers and their crew?; and is the apparent decrease in incidents this year due to any such guidance, or “did the industry just get lucky?”.
In answer to the first of Mr Hookham’s questions the Dutch research facility released some guidance to crews in January warning them to beware ‘parametric rolling’. This occurs when waves, following the ship at a certain wavelength, cause the vessel to roll. And as ships have become larger, the container stacks have become higher and vessels have become significantly wider. This means a ship which rolls substantially, will right itself rapidly, causing acceleration at the top of the stack to be greater than at the lower part. Think of a bar across two concentric circles, the bar movement over the inner circle is less than the outer circle.
This was the conclusion reached by the marine accident investigation into the losses from the MSC Zoe on 1 January 2019 in the North Sea. Lianne van der Veen, chairman at the Marine Accident Investigators’ International Forum in the Netherlands, said the accident “had been caused by the high stability of the vessel causing it to rapidly right itself as it rolled, increasing the forces on the container stack.”
Worryingly, Ms van der Veen added: “The length and optimal GM [essentially vessel’s centre of gravity] of ultra-large container vessels (ULCVs) exceeds the valid ranges of most international technical regulations and standards for the calculation of accelerations.”
That is to say that current regulations do not cater for the forces found on a large modern container vessel experiencing severe rolling in heavy weather. Most modern containerships have lashing bridges that cater for stacks of up to five high on deck. But these ships are often stacked ten high or more, meaning that the only thing holding the top half of the stacks are the twistlocks.
A container industry consultant with knowledge of vessel design looked at the ONE Apus accident from 2020 and said that, while he had no idea of the wind or wave direction, or other pertinent factors, he could see from the photographs that containers had fallen from the ONE Apus from both the starboard and port sides, “this would suggest accelerations from a rolling motion”.
Even though this conclusion cannot be decisive, the similarities may be hard to ignore. The consultant added that, as the forces on the container stacks increased so would the forces on the lashing gear and, in many cases, exceed the designed load limits, adding to the causes of the loss of containers.
“Many more topics, tests and measurements will be undertaken by the project, which will continue reporting on progress and sharing insights on a regular basis through the IMO and other forums,” said the WSC.