The New Megaships Pose Additional Risks, Despite Economic Benefits
(Source: Dominik Luckmann, Unsplash)
Commercial shipping interests’ push towards ever-larger mega-boxships poses unique challenges for the maritime industry, especially amid concerns that port infrastructure has not kept pace with vessel size and capacities, according to a report by global insurer Allianz. The insurer has raised concerns over growing risks associated with larger vessels, ranging from navigational challenges, to accidents and disasters, to unprecedentedly complex and costly salvage, should an incident occur.
“The different consequences of larger vessels are now becoming more apparent, including impacting supply chains. Large vessels and the ports required to handle them present a massive accumulation of risk, while the costs are disproportionately greater when things go wrong,” said Andrew Kinsey, Allianz Global Corporate & Specialty (AGCS) Senior Marine Risk Consultant.
As demonstrated by incidents such as the M/V EVER GIVEN’S recent blockade of the Suez Canal, responding to incidents involving large container ships is more complex and expensive, due in part to the limited facilities and salvage equipment available to handle ships of these huge sizes.
“Due to these concerns, insurers have found large container ships and other large vessels are often a volatile risk to underwrite….We need to look more closely at how we can minimize the risks of mega-ships, especially in ports or in bottleneck passages like the Suez Canal or the Panama Canal, given the disruption we have seen that grounding incidents can cause,” said Rahul Khanna, AGCS Global Head of Marine Risk Consulting.
However, according to the Allianz report, the international shipping industry continued its long-term positive safety trend, despite pandemic conditions. Shipping volume trends have continued upward, declining only marginally in 2020, and are now on course to surpass 2019 levels in 2021. “Despite the devastating economic impact of COVID-19, the effect on maritime trade has been less than first feared, demonstrating the resilience of the shipping industry,” noted the report.
The above is a summary of one or more news stories reviewed by the author of this article. It may contain comments or views of the author only.
This article is intended for general interest and does not constitute legal advice.
