Containers crammed onto large ships carrying various goods from tires to smartphones are capsizing at an alarming rate, sending millions of dollars of cargo to the bottom of the ocean as pressure to speed up deliveries increases the risk of security errors.
The shipping industry is experiencing the largest increase in lost containers in seven years. More than 3,000 containers fell overboard last year, and more than 1,000 have gone overboard so far in 2021. The accidents are disrupting the supply chains of hundreds of U.S. retailers and manufacturers, such as Amazon and Tesla.
There are a myriad of reasons for the sudden spike in accidents. The weather is increasingly unpredictable, while ships are getting bigger, allowing containers to be stacked higher. But compounding the situation is the rise of e-commerce following the explosion in consumer demand during the pandemic, increasing the urgency for shippers to deliver goods as quickly as possible.
“The increase in container movement means that these large container ships are much closer to full capacity than in the past,” said Clive Reed, founder of Reed Marine Maritime Casualty Management Consultancy. “There is commercial pressure on the vessels to arrive on time and consequently make more voyages.”
After hurricane-force winds and large waves battered the 364-meter One Apus, causing the loss of more than 1,800 containers. The incident was the worst since 2013, when the MOL Comfort broke in two and sank with its entire cargo of 4,293 containers in the Indian Ocean.
In January, the Maersk Essen lost some 750 container ships while sailing from Xiamen, China, to Los Angeles. A month later, 260 containers broke loose from the Maersk Eindhoven when it lost power in heavy seas.
The need for speed is creating precarious conditions that can quickly lead to disaster, according to shipping experts. The dangers range from stevedores incorrectly locking boxes on top of each other to captains failing to steer out of a storm to save fuel and time when facing pressure from charterers, they said. One wrong move can endanger cargo and crew.
The chances of mishaps increase as depleted mariners face deteriorating conditions during the pandemic. Allianz Global Corporate & Specialty estimates that human error contributes to at least three-quarters of accidents and fatalities in the maritime sector.
Nearly all of the recent incidents have occurred in the Pacific Ocean, a region where the heaviest traffic and worst weather collide. The sea route connecting Asian economies with North American consumers was the most lucrative for shipping companies last year. Chinese exports have soared as the pandemic fuels demand for everything people need to work, learn and entertain from home.
The journey has always been tough, but it has become more dangerous because of changing weather patterns. Increased traffic from China to the U.S. last winter coincided with the strongest winds over the North Pacific since 1948, increasing the likelihood of rougher seas and bigger waves, said Todd Crawford, chief meteorologist for The Weather Company.
With 226 million containers shipped each year, the loss of 1,000 or more may seem like, well, a drop in the ocean. “It’s a very small percentage of losses,” said Jacob Damgaard, associate director of loss prevention at Britannia P&I at a conference in Singapore on April 23. “But it’s almost 60% of the monetary value of all container incidents.”
At an average of $50,000 per box, the One Apus lost an estimated $90 million in cargo alone, the highest in recent history, according to Jai Sharma, a partner at maritime law firm Clyde & Co. in London. Year-to-date losses are estimated at $54.5 million.
The issue is also gaining attention since the 400-meter-long Ever Given ran aground in the Suez Canal last month, highlighting the vulnerability of the maritime sector. The mega-ship blocked traffic through the vital waterway for nearly a week, and the impact on global trade is still being felt.
So far, none of the recent container accidents have been directly attributed to safety failures. The International Maritime Organization said it is still awaiting the results of investigations into the latest incidents, and cautioned against drawing any conclusions before then.
But many experts say the situation has become more dangerous because of the pressure on supply chains since the pandemic. When ships approach a bad weather situation, captains have the option of moving away from danger. But the attitude is “don’t go around the storm, go through it,” said Jonathan Ranger, head of Asia Pacific seafarers at American International Group Inc.
“When you combine that with potentially poor maintenance of the twist locks and cabling needed to secure these boxes, it’s an accident waiting to happen,” he told the industry conference in Singapore.
Heavy-weight containers
With boxes stacked higher and higher, a ship can become more unstable in a storm: wave after wave can cause the vessel to roll at steep angles, putting stress on the securing of the containers. The situation is further aggravated if the stack is overloaded. That can happen when there are incorrect weights on container bills of lading, something many in the industry say happens all too often.
“You can’t see inside the containers,” says Arnaldo B. Romero, a captain who sailed from Japan to South America late last year. “So when the cargo is heavy and the officer in charge of cargo planning puts it on top, during the rolling of the ship, we can lose control.”
Overworked crews also increase risks. Reduced manpower on board and an increase in the number of containers on deck make it increasingly difficult for crews to check every bar and bolt effectively, said Neil Wiggins, managing director of Independent Vessel Operations Services Ltd.
The health and safety of seafarers is also at stake. The collapse of multiple levels of 40-foot containers during a raging storm is one of the most terrifying experiences for a captain and his crew. Post-traumatic stress disorder among crew members is common, according to Philip Eastell, founder of Container Shipping Supporting Seafarers.
Concern is growing for the industry to address the situation.
“Traffic on the seas is different than it was 10 years ago,” said Rajesh Unni, founder of Synergy Marine Group, which provides services to shipowners. “How do we adapt as an industry? It’s convenient to blame the captain, but we need to look at how the port infrastructure needs to change, how ships transit.”
The IMO, which is the United Nations agency responsible for regulating shipping, says the countries under whose flag ships sail are responsible for issuing ship safety certificates, while the ports they call at are responsible for ensuring compliance with container cargo regulations.
The agency said its subcommittee on cargo transportation routinely examines container-related issues and has scheduled its next meeting for September.
AIG’s Ranger says companies must be prepared to weather storms and maintain vessels properly. “These vessels are designed to carry the boxes, and to have these losses is – dare I say it – unacceptable.”
