News Entries

The Marine Layer- Lost at Sea

Thousands of containers are lost at sea every year, but the exact number is tough to say since not every lost container is reported. In the last 3 months alone, we’ve seen significant cargo lost at sea in three separate events: ONE Apus (1,800 containers), and the Maersk Essen (750 containers), ONE Aquila (100 containers). As container vessels continue to become larger, with greater capacity, will this become the new norm?

The American Institute of Marine Underwriters (AIMU) reported the following in their weekly newsletter: As Maritime Executive reports:

...heavy weather in the North Pacific was again blamed for the loss of containers aboard one of Maersk’s containerships. This was the third container loss incident recently reported in the Pacific.

There seems little doubt that current practices for lashing and securing containers onboard large containerships are no longer fit for purpose with an increase in the frequency and severity of bad weather, particularly on the Pacific. Containerships can be subject to pitching and rolling violently as well as a phenomenon known as 'parametric rolling', which can see the ship roll30-40 degrees or more. Such powerful forces can easily snap lashings and locks of a 10-high container stack resulting in losses to the sea and damage to remaining boxes.

A report published last year by the UK’s Marine Accident Investigation Branch(MAIB) into the January 2018 loss of 137 containers in the Pacific from the UK-flagged 13,460 teu CMA CGM Washington, concluded that the collapse of container stacks was caused by a number of factors including excessive racking loads.

Moreover, a recent paper, published in the Journal of Ocean Engineering and Technology, concluded that due to the risks associated with dynamic stability on container vessels, including parametric rolling, new containerships were likely to feature “reduced onboard cargo volumes in comparison to existing ships." The paper added that there was, “a great possibility that they[existing ships] will be forced to decrease their onboard cargo volume or operating speed" (The Loadstar, 1/21/2021).

One thing that’s for certain is the risk of losing containers overboard is not going away any time soon. Under International Trade Law, ocean carriers can limit their liability to 500.00 per shipping unit, which in most cases is only a fraction of the actual cargo value. These losses are a reminder for logistics professionals to always offer shippers and importers all-risk marine insurance as a way for cargo owners to protect their goods in transit. Marine insurance not only covers the full cargo value in the event of a loss but can also include the cost of the ocean freight charges and the insurance costs as well(CIF—cost, insurance, freight). In addition to the physical loss or damage to cargo, the Marine Policy will also provide coverage should the ocean carrier declare a General Average event. Insurance rates to protect cargo in transit remain quite competitive. With the number of containers lost clearly on the rise, now is a good time to review insurance options with your clients. At IB&M we always recommend having the client accept or decline marine insurance in writing to avoid an uncomfortable conversation down the line.