Containers lost overboard

[Stemar]

Er... we have this. Have had for some years. It’s called the Paris Memorandum on Port State Control. Enforcement in the UK is by the MCA.

It works.

Paris MoU

Good. My knowledge of commercial shipping is limited to dodging them in the Solent and the occasional cross-channel ferry trip, which, of course, makes me perfectly qualified to comment on it here

I suppose no system will totally prevent cheapskate operators putting crews and oceans at risk, and the ONE Apus shows that a bad storm will overwhelm the best run ship. Neptune rules at sea, not us.

 

[Kukri]

As a matter of interest, are you aware of any data which helps to quantify "ages"?

The average service life of a dry container is seven years. But then it gets scrapped or sold as a sort of shed. I suppose in the end the thin steel will rust through and the insulation will degrade. This might be quite a slow process. A tank container is made of much thicker steel and may last much longer.

 

[dom]

The average service life of a dry container is seven years. But then it gets scrapped or sold as a sort of shed. I suppose in the end the thin steel will rust through and the insulation will degrade. This might be quite a slow process. A tank container is made of much thicker steel and may last much longer.

Oops my poor English, my old school teachers would laugh ?

I was more wondering about how many float and stay afloat, such as perhaps white good containers full of polystyrene and such like. There are constant stories of containers washing up a few days:
Alert over shipping container washing up near Porthcawl.

But I was more thinking about bobbing around for days?, weeks?, or even months?

 

[siwhi]

Talking of scrapping, this is an interesting and relevant video on the increased scrapping of ships in 2020:

 

[newtothis]

It seems unlikely that ONE Apus would have been in poor condition. Japan isn't exactly a flag of convenience. I'm quite happy to accept that flags of convenience are a bad idea, but it wouldn't be too hard to get rid of them.

ONE Apus is only a year old, and Ocean Network Express, the charterer, has a good safety culture (and is run by a former seafarer).
The issues here seem to be the risk of deck-stowed containers being affected by rolling/pitching motion and the lack of a strong enough system to stow them. I think there were some ACL ships that had cell guides going to the top of the stack to prevent collapses like this one, but most rely on twistlocks and lashings for stability.
Part of the problem in apportioning responsibility is that the lashings are secured by stevedores employed by the port of loading. The old man has ultimate oversight but doesn't control the stevedores.
The container logistics supply chain is very complicated, with a lot of touch points. Just pointing to the owner/operator of the ship isn't always the right thing.

 

[newtothis]

Talking of scrapping, this is an interesting and relevant video on the increased scrapping of ships in 2020:

That would be more interesting if half of it was not entirely wrong. Consumer demand in major economies is going through the roof. Lockdowns have meant people can't spend on services but can still spend on goods. Containerised freight rates are at record highs. Scrapping has actually been quite low this year, partly because the yards were closed for a large part of it. Yes, some older cruiseships have gone to meet their makers, but this is a fairly superficial and simplified view of the industry.

 

[pyrojames]

The more I listened to that the more I felt it was a waste of time.... I bet the thousands of Filipino and Indian crews would love $75k p.a....

 

[siwhi]

That would be more interesting if half of it was not entirely wrong. Consumer demand in major economies is going through the roof. Lockdowns have meant people can't spend on services but can still spend on goods. Containerised freight rates are at record highs. Scrapping has actually been quite low this year, partly because the yards were closed for a large part of it. Yes, some older cruiseships have gone to meet their makers, but this is a fairly superficial and simplified view of the industry.

Thank you, that's interesting. 2020 is certainly a challenging year!

 

[Kukri]

Ships don’t have a design life of forty years. A ship’s life is measured in Special Surveys. A Special Survey is required once every five years. Think of it as a very stringent MOT. The ship is dry docked and inspected by the Classification Society. Changing Society doesn’t work - the requirements of the outgoing society must be adopted by the incoming Society.

At the first Special, very little is needed. By the third, at the age of 15, steel renewals may be required. Much will depend on how well the ship was built and in particular how carefully her ballast tanks were painted. And of course on how she is looked after. Some ships that I had a hand in building made it to the age of thirty but they never changed owner and were built with very great care. Twenty years is a pretty typical age for a ship to be scrapped but much depends on the freight market, which is cyclical but not easy to predict. At the moment I’m running a bunch of ships that are coming up to twenty. Their sisters owned by associated companies were scrapped because it wasn’t worth keeping them going given the cost of passing the fourth Special, but the market has just turned our way so we will keep ours going.

 

[Chae_73]

It seems incredible that an asset which may cost over $100M has a useful life of only 20 years. I can't think of any other comparable assets with such short lives. To be clear, not doubting the veracity of this, I just find it surprising.

I guess it keeps the yards in the far east busy.

 

[Kukri]

It seems incredible that an asset which may cost over $100M has a useful life of only 20 years. I can't think of any other comparable assets with such sort lives. To be clear, not doubting the veracity of this, I just find it surprising.

I guess it keeps the yards in the far east busy.

Aircraft.

 

[Chae_73]

Yes, I did consider aircraft. It seems that typical service life of a large jet aircraft is between 25-30 years so similar ballpark. I guess the current collapse in demand will bring that down a bit.

 

[penberth3]

It seems incredible that an asset which may cost over $100M has a useful life of only 20 years. I can't think of any other comparable assets with such short lives. To be clear, not doubting the veracity of this, I just find it surprising.

I guess it keeps the yards in the far east busy.

It sounds like a lot of money, but work out the £ per ton per mile over a twenty year life and it comes down to something much smaller! And steel is one of the easiest things to recycle.

 

[pyrojames]

Yes, I did consider aircraft. It seems that typical service life of a large jet aircraft is between 25-30 years so similar ballpark. I guess the current collapse in demand will bring that down a bit.

Production molds for modern vehicles. Maybe not 100m, but a much shorter life span.

 

[burgundyben]

Yes, I did consider aircraft. It seems that typical service life of a large jet aircraft is between 25-30 years so similar ballpark. I guess the current collapse in demand will bring that down a bit.

The big ones take 20000 TEU which I think is 10000 40ft containers. So per contrainer per day not alot. I have no concept of running cost.

 

[newtothis]

It seems incredible that an asset which may cost over $100M has a useful life of only 20 years. I can't think of any other comparable assets with such short lives. To be clear, not doubting the veracity of this, I just find it surprising.

I guess it keeps the yards in the far east busy.

A panamax boxship can earn about $20m in a 45-day round trip. Subtract a couple of million for fuel, some more for port fees, crew costs and financing... Let's say £10m per voyage. Only takes a couple of years to break even. 20 years on, you pick up another few million for the scrap metal.
It only works when rates are good, but there is a reason that there are some well off people in shipping. But the end of life value of an older ship is generally sofa change.

 

[Kukri]

The big ones take 20000 TEU which I think is 10000 40ft containers. So per contrainer per day not alot. I have no concept of running cost.

I have a pretty good idea of mine, and can make educated guesses about everyone else’s, but this is the most commercially sensitive information in shipping!

We don’t take fuel , or port costs, into the calculation of operating costs, all shipping companies account these separately, but fuel is by far the biggest item - see here - we buy VLSFO*

Price information - Petrol Bunkering

The biggest boxboats are burning about 260 tons a day at flat chat. Mine are older and smaller and burn 166 tons at 24.5 knots or these days 53 tons at 12. Lubricating oil is another US$2,000 or so a day at flat chat. (God bless B&W’s alpha lubricator!)

After that comes crew wages and travel, stores, spares, dry dock costs expensed over the 30 month cycle, insurance and victualling. If you said US$9,500 a day for those you wouldn’t be very wrong.

Ships get scrapped when the cost of the next Special Survey dry docking becomes not worth it in relation to anticipated earnings. A couple of years ago a Panamax container ship owned by a German tax partnership outfit was scrapped at the age of seven and a half. They had let her go to a disgusting extent. She actually beat the record set by Shell when they scrapped their beautiful French built ULCCs Batillus and Bellamya at a similar age at the height of the tanker crisis.

*as I persuaded my boss not to fit scrubbers - thank the Lord! What a good decision that was!

 

[newtothis]

*as I persuaded my boss not to fir scrubbers - thank the Lord! What a good decision that was!

Good environmental call on the scrubbers, and good financial call so far. But do you have any concerns over the spread increasing again? Maersk initially said they wouldn't touch then, but then did. And MSC seem to have gone all in.

 

[JumbleDuck]

Aircraft.

True, but passenger jets normally make it to about 30 years. The USAAF is planning to operate at least some B-52s until they are over 90 years old.

 

[Kukri]

Good environmental call on the scrubbers, and good financial call so far. But do you have any concerns over the spread increasing again? Maersk initially said they wouldn't touch then, but then did. And MSC seem to have gone all in.

I reckon we’ve been lucky. Big Oil have had a free year to get on with replacement of their refinery equipment -( now that is talking in billions!) - and I don’t see the spread getting very big again. And I hate the damn things anyway - taking the sulphur dioxide out of the air and putting it straight in the sea?