Just before Thanksgiving I spoke with Andrew Kinsey, a senior marine risk consultant for Allianz Global Corporate & Specialty, who addressed a variety of issues on his radar screen.
A retired master for both Maersk Line, Ltd. and the U.S. Military Sealift Command, he was returning from Alabama where he had done a loss control survey of the primary container terminal in Mobile, operated by APM Terminals.
He believes Mobile, like Houston, is well positioned to benefit from the arrival of ships up to 13,000 TEUs in capacity when the Panama Canal starts handling them in 2016.
They are “good, viable options” to ports in the South Atlantic—“they are not going to take all the business, but they will be in a position to handle some of it.”
While there has been a lot of focus on the ability of ports around the world to handle big ships, he noted less attention has been given to the expanded canal’s impact on feeder ships and feeder ports.
“The former panamax tonnage—that’s not going away,” Kinsey said, adding with those ships likely to cascade into trades where container vessels of 1,500 to 2,000 TEUs currently operate.
That requires ports to take a close look at their infrastructure—everything from cranes to tugs to bollards—so they can handle the bigger vessels.
The boom in natural gas and petroleum production resulting from hydraulic fracturing is having a major impact on the maritime industry, with LNG terminals built or planned to handle imported gas now being converted into export facilities. Increased oil or natural gas condensate production has been a boon to the operators of coastal vessels such as articulated tug barges.
“The Achilles heel in all this is getting it from the field to the vessel,” because so much shale oil is moving on rail tank cars. That seems likely to continue, he said, as it is difficult to move barges closer to, for example, the Bakken field.
“There are parts of the Missouri River you can walk across, let alone try to get a tug barge up there,” Kinsey said.
He has relatively few concerns about the safety of LNG as a fuel or cargo, noting “we’ve been looking at it for 35 years now in transport and there hasn’t been a major incident… There are lots more dangerous bulk cargoes running out there than LNG.”
Kinsey is more concerned about how class societies are going to address structural issues related to large containerships following the accident in June 2013 when the MOL Comfort broke in half during a storm in the Indian Ocean.
Although no one in the crew was killed or injured, he still believes “MOL Comfort was a horrible disaster. I hate to be the gloom-and-doom guy, but I don’t think it’s the last time we are going to see an incident like that.”
He said bigger ships could be subject to cumulative stresses from thousands of overloaded containers whose weights are sometimes misdeclared.
Shipping companies are also seeking to reduce the amount of ballast and fuel that ships have on board, “because nobody wants to be carrying deadweight or overhead if they don’t have to,” he said.
With slow steaming of containerships the norm, “you’re in heavy weather longer. You can’t kick it up to 24 knots and run away anymore. We used to call it the Monty Python School of Navigation—you know, bravely run away,” Kinsey said.
Still, he added, containerships are inherently the safest types of ships and have the fewest numbers of casualties.
With ships getting larger, he thinks it is wise, from a risk management point of view, for shippers to split up expensive shipments on more vessels to avoid concentrating risk.
He also believes assureds would be wise to be careful about the amount of outsourcing of their transportation work.
“Don’t put it all in the hands of the 3PL. If the 3PL has better experience and knowledge than you do, then fine. But don’t just hand it over and wash your hands of it. Know where your cargo is; who is carrying it,” Kinsey said.
If a shipper is moving substantial quantities of cargo, it should leverage its power to obtain preferential treatment, such as underdeck stowage or in an aft bay.
Similarly, he explained that shippers need to know how their cargo moves even in the last mile of transportation, especially in developing countries.
“That’s the thing about megaships—you are dealing more with feeder ports and feeder vessels and every time you have a human element touching a container, you are dealing with increased risk,” he said.
With the increased use of slow steaming, Kinsey said perishable cargoes can be “one delay away from cargo being spoiled because of the increased transit time.”
This past fall U.S. farmers complained they were victims in the contract negotiations between the International Longshore and Warehouse Union and employers. Worker slowdowns in the Pacific Northwest endangered exports of their harvest, especially perishable crops.
Another topic of interest to Kinsey is cybersecurity, something he said the Coast Guard is “taking a long, hard look at.”
“Gone are the days when you used to take your colored pencils and draw up your stow plan,” he noted. “So much of stow plans and everything else are transmitted to the vessels via the internet” or satellite, he said.
“It doesn’t take much to introduce a virus or worm for malicious effect—you can all of a sudden do everything from scrambling GPS signals to changing stability… The implications of cybersecurity from a shipper’s standpoint are endless,” Kinsey said.
This column was published in the January 2015 issue of American Shipper.