Container Loss Events: A Deep Dive

Over the course of the last several months, there have been multiple incidents involving large container vessels losing cargo overboard or damaging containers in transit during heavy weather. This is an expected event in the maritime industry, but the scope, scale, and timing of these incidents have been unprecedented. We will analyze the recent events below to outline the underlying similarities and help provide context to what is happening in the industry.

ONE AQUILA
On October 30, 2020, the 14,000 TEU ONE Aquila was enroute from Yantian, China to the Port of Long Beach, CA when it encountered severe weather in the North Pacific. The event resulted in a container stack collapse and 100 containers being lost overboard. The vessel was diverted to Tacoma, WA for survey and repair and was quickly returned to regular service. The damages to the vessel were not major.

ONE APUS
The ONE Apus is a 14,000 TEU vessel, and on November 30, 2020 suffered a collapse of the container stacks onboard while enroute from Yantian, China to Long Beach, CA. The resulting casualty involved a reported 1,816 containers lost overboard. This would categorize the event among the largest incidents in container shipping losses without the loss of a vessel. The ship was diverted to Kobe, Japan where container unloading operations proceeded slowly since December 8, 2020. The vessel has since cleared all collapsed containers, an additional 940 boxes stowed on deck, and subsequently proceeded onto the next scheduled port of call in Long Beach, CA arriving on April 12, 2021.

MAERSK ESSEN
The Maersk Essen was also sailing along the China to US west coast trade route between Xiamen and Los Angeles, CA when the 13,000 TEU vessel experienced severe weather in the North Pacific. The event transpired on January 16, 2021 and the ship was subsequently diverted to the port of Lazaro Cardenas in Mexico. Reported losses from this event were 750 containers lost overboard with an additional 178 containers stowed on deck that were damaged and/or required re-positioning. The Maersk Essen departed Lazaro Cardenas and eventually anchored in Southern California’s San Pedro Bay six weeks after the date of the incident.

MAERSK EINDHOVEN
On February 17, 2021, the Maersk Eindhoven was underway from Xiamen to Los Angeles, CA when the engines failed during severe weather off the coast of Japan. Because of this mechanical failure, an estimated 260 containers were lost overboard, and once power was restored, the vessel subsequently turned around and headed for port of refuge in Japan which was later determined to be APM Terminals in Yokohama where the vessel could be inspected and repaired. This was another 13,000+ TEU vessel affected by weather in the North Pacific, losing a significant number of containers in the process, and causing delays and additional incurred costs.

EVER GIVEN
As discussed in a dedicated article in this volume of our Falvey Foresight, the Ever Given was sailing on March 23, 2021, from ports-of-call in China to Rotterdam when the 20,000 TEU mega-ship ran aground on the banks of the Suez Canal. Weather may have been a contributing factor with high-winds over the dessert terrain able to push the ship off course in the narrow channel, and a dust storm reportedly obstructing view although not determined conclusively. The Ever Given was wedged onto both opposite walls of the canal and completely blocked off all traffic for six days of intensive efforts to re-float the vessel. Although there was no physical loss or damage to the cargo in this incident, there will be significant economic impacts to be settled as part of the damage to the canal, efforts to re-float the ship, resulting delays, and general average payments.

In addition to these five large and high profile container loss events occurring over the course of approximately the last six months, there have also been losses with the Ever Liberal, E.R. Tianping, MSC Aries, MSC Ariane, and the Maersk Eureka. A few reoccurring themes appear throughout many of these incidents.

All of the stories mentioned occur on large container vessels with carrying capacities of at least 13,000 TEUs or greater. For the most part, these incidents have largely been seen on trans-Pacific trade routes with heavy weather in the North Pacific causing or contributing to the incidents. In cases such as the ONE Apus event, the winter storms were a direct cause of the loss while in events like that involving the MSC Ariane, engine failure was to blame with weather and port congestion contributing to delays of the cargo.

These events have a composite effect of significant losses over a relatively short period of time. There have been approximately 4,000 containers lost or damaged over the course of this winter on just the transpacific trade route meeting these loss conditions alone, and there are many underlying reasons why.

One of the major contributing factors in these recent marine casualty losses can be attributed to the COVID-19 pandemic. The fallout from COVID-19 has significantly affected global trade in many ways. With the rise in e-commerce growth, reduction in other types of spending or services, and the optimism about returning markets with vaccine distribution in sight, the trade flow from China to US is far out of balance. US consumers are ordering more online and buying less in stores than ever, and this has affected everything from freight rates, to container availability, to cardboard supplies. The new much larger ships with more cargo handling capabilities than ever are sailing at or near capacity with less empty containers in the stacks which increases the weight and momentum of the containerized cargo while these vessels roll in heavy seas. When some of these factors are met with increasing ship size and heavy weather in the cold winter waters of the North Pacific, this can make for a tumultuous situation. There is also evidence that these storms are getting progressively more severe and longer-lasting due to global climate change, compounding the effects. Although there are many factors at play here, COVID-related trade reasons are one that will hopefully abate as the markets hopefully return to pre-COVID equilibrium in coming months, and regulations in the shipping industry can hopefully attempt to address some of the other issues.

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Container Loss Events: A Deep Dive

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