Mega-containerships - Questions of insurance and risk

An American Institute of Marine Underwriters (AIMU) seminar brought into the focus the growing risks associated with mega-containerships in the event of casualty and the huge number of cargo interests involved.

The last 18 months have seen a number of major containership casualties including fatal blaze last March on the 15,252 teu Maersk Honam the fire on the 7,510 teu Yantian Express in January this year.

A panelist on the “Megaships” session at the seminar, who represents cargo interests, noted that General Average was an ancient concept, before railing against its inappropriateness where ships might be carrying goods belonging to thousands of cargo owners.  

In both the cases of Maersk Honam and the Yantian Express General Average was declared.

Read more: Shippers yet to pay security on one-third of undamaged containers on the Yantian Express

Showing a picture of a large megaship, with nearly two dozen rows of boxes stacked high, to the group, the panelist expressed a great frustration that each box could generate multiple emails that would keep claims staff busy non-stop for weeks. He added that the paperwork swirling around, needed to settle claims, would frequently contain errors, or was incomplete. 

The speaker, who works with a leading cargo claims consultant, suggested that a move to a more streamlined system of electronic documentation would go a long way towards smoother and quicker resolution of claims. He said: "The system is broken; it was not designed for vessels like this”, referring to the 18,000 teu monster up on the presentation screen. 

In discussing whether large containerships might see a differential insurance rating, previously under consideration but not implemented, he hinted that: "With more data now, this debate will re-open. Large containerships do indeed present more risk." An actual study on this subject has been undertaken by the TT Club.

According to the TT Club a major containership fire occurs every 60 days and that as the size of containerships increase so does the potential risk and consequence of a large explosion or fire. The club noted in a loss prevention bulletin last September that the capability to respond to a fire at sea had not progressed at the same rate as ship capacities and the large array of cargoes carried.

Read more: A major containership fire occurs every 60 days

Posted 10 May 2019

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Barry Parker

New York correspondent, Seatrade Maritime

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