Shipping pains: the Hoegh Osaka and containers lost at sea

Giant ships can cause giant problems - like the dozens of luxury cars including a Rolls-Royce Wraith bound for Dubai now stranded off the coast of England.

A stricken ship off the banks of Southampton has turned a spotlight on the potentially fragile nature of an economic lifeline the UAE clings on to – the container traffic business, which is a key contributer to country's non-oil GDP.

Somewhere in the UAE this week is a very disappointed Rolls-Royce owner.

By now, if all had gone to plan, they would be luxuriating behind the wheel of a highly personalised Wraith, the head-turning fastback launched by Rolls-Royce in 2013 with a starting price of £230,000 (Dh1.2 million).

All, however, did not go to plan.

On January 5, the Hoegh Osaka, a giant car-carrying ship bound for Dubai via Bremerhaven in Germany, left Southampton in the UK and, after suddenly listing to one side, was run aground on a sandbank in a desperate attempt to save it.

Salvage efforts are under way to right the ship by pumping out water from its hull, with hopes that the Hoegh Osaka can be refloated and towed back to port tomorrow.

Such incidents are rare. But that will be small consolation to the owners of the 1,100 Land Rovers and Minis on board, many of which, along with the Wraith, were bound for Dubai. No one knows how long they will now have to wait for their cars.

Some of those on the lower decks “may well have been washed by seawater but we won’t know until the salvor can get right inside”, says Mark Clark, a spokesman for Norwegian shipping company Hoegh Autoliners.

The Rolls, at least, appears to have kept its tyres dry.

“She’s sat on car deck 12 and she’s not been touched by any water, though of course she is still at a 52-degree angle,” says Mr Clark.

It remains to be seen whether all or any of the cars on board “will be just driven off and sold as new, or whether they’ll go into the used-car market, or the manufacturers will just write them off”.

Regardless, the delay for the customers eagerly awaiting their new cars in Dubai serves as a reminder not only of the dependence of the UAE and other economies on the world’s maritime trade network, but also of the potentially fragile nature of that economic lifeline.

Specialist ships aside, that lifeline is almost exclusively composed of the vast container ships that ferry goods constantly between Asia and Europe, and all points in between. Again, it would be unfair to characterise the global container industry as being at the mercy of the oceans. According to the World Shipping Council, in 2013 it successfully delivered about 120 million cargo containers, with a total value of more than US$4 trillion (Dh14.69tn).

But accidents do happen.

Stung by what it described as “unsupported and grossly inaccurate statements” that up to 10,000 containers were lost from ships every year, in 2014 the World Shipping Council published the results of its own survey.

“Even with proper packing of the cargo into the container, proper container weight declaration, and proper stowage and securing aboard ship,” the council conceded, bad weather and “more catastrophic and rare events”, such as groundings, structural failures and collisions, still resulted in substantial numbers of containers being lost at sea.

It is something to consider next time the supermarket runs out of your favourite coffee.

Some losses have become legendary, such as the fleet of 28,000 rubber ducks lost overboard from a container in 1992 and supposedly still washing ashore here and there to this day.

And this month it emerged that 18 years after they were lost overboard in 62 containers in 1997, pieces of nautical-themed Lego are continuing to turn up on British beaches.

After surveying its members, the World Shipping Council concluded that in the six years between 2008 and 2013 an average of 546 containers had been lost overboard each year, usually shaken loose from their lashings by heavy seas.

Taking into account the catastrophic loss of entire ships, however, bumps up the average number of containers lost at sea each year to 1,679.

For example, in 2011 the 236-metre Greek-owned MV Rena broke its back after running aground in bad weather near Tauranga, New Zealand, spilling 900 containers overboard.

Two years later, all 4,293 containers on board the MOL Comfort were lost when the 316-metre ship, bound from Singapore to Jeddah, was snapped in two by stormy seas 370 kilometres off the coast of Yemen.

Such are the hazards of an industry upon which the entire world has come to depend for the vast majority of all retail goods, from baked beans to washing machines.

According to the UN’s most recent annual Review of Maritime Transport, the humble container is nothing less than “the driver of 20th century economic globalisation”.

There are, says the international container shipping information service Alphaliner, 5,962 container ships plying the oceans with a total capacity of 18.8 million 20-foot containers – also known as TEUs, or Twenty-foot Equivalent Units.

Like every other economic marker, the annual global container trade faltered briefly in 2009 but has otherwise grown steadily every year from about 50 million TEUs in 1996 to 160 million in 2013.

And in all 22 industrialised countries examined for a study published in 2013, “containerisation explains a 320 per cent rise in bilateral trade over the first five years after adoption and 790 per cent over 20 years”.

You build the container port, in other words, and they will come.

That has certainly been the experience of the UAE, which has the good fortune to lie along the all-important Asia-Europe container trade route, known in China as the New Maritime Silk Road. Figures show that the growth in container traffic in the UAE has both mirrored and, to an extent, powered the astonishing growth of the economy.

In 2000, barely 5 million 20-foot containers passed through the nation’s ports. Now, the World Shipping Council says, two of the world’s top 50 container ports are in the UAE, and in 2012 in excess of 13 million TEUs were handled by Jebel Ali, which is in the top 10.

Abu Dhabi is catching up fast. By 2030, Khalifa Port, which is being developed “as part of the drive to diversify the emirate’s economy away from hydrocarbon revenue”, is expected to be handling 15 million containers a year and contributing 15 per cent of the nation’s non-oil GDP.

Now, as global trade continues to expand, a race has developed among container shipping companies eager to build and operate ever larger and more cost-effective ships.

Last week, as the beached Hoegh Osaka lay off the south coast of England, another ship drew the attention of the world’s media when it docked at the port of Felixstowe, on the country’s east coast.

The Hong Kong-registered CSCL Globe, which set off on its maiden voyage from Qingdao, China, in December, is the world’s largest container ship.

Designed for the Asia-Europe run, there are only a few ports at which it can call. None in the US is capable of handling it.

More than 400 metres long, it can carry 19,100 20-foot containers which, if laid end to end, would stretch 115 kilometres.

Put another way, as China Shipping Container Lines also chose to do, the CSCL Globe could carry 300 million tablet computers, enough for one each of the entire population of the UK, France, Germany, Spain and Italy combined.

Not that biggest is necessarily best, says Simon Bennett of the International Chamber of Shipping, who highlights an intriguing problem that is another product of our economically interconnected world.

The shape of the shipping fleets now coming on stream was dictated years ago by rising oil prices and, while “you would think it is good news for the shipping industry that fuel prices have collapsed, because clearly it makes the operating costs of ships much cheaper, in fact it creates a dilemma”, he says.

The big container ships now grabbing the headlines were built to run at low speeds on the assumption that oil prices would be very high.

Now they have fallen, “people are asking the question, does it make economic sense to operate ships at slower speeds? Now the price is so low, some analysts are suggesting that if you go faster you would need to operate fewer ships”.

Such analysis comes too late for the owners of ships such as the CSCL Globe, planned and ordered years ago. And the Globe won’t wear its crown for long.

Within a few weeks Felixstowe will see the maiden arrival of the MSC Oscar, capable of carrying 19,224 containers and due to be followed over the next year or two by dozens of other gigantic ships.

jgornall@thenational.ae

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