Ocean Shipping May Face 'Deepwater Horizon' Test

Container shipping may face its “Deepwater Horizon moment” if a casualty involving a large vessel overwhelms the salvage industry’s ability to deal with removal of the containers and wreckage, a London maritime attorney warned.

The warning comes after the Rena container ships split apart this week after running aground a reef off the New Zealand shore in early October. Costamare, the ship’s owner, promises to pay for the costly salvage.

The consequences of a serious incident involving one of the larger container ships “may well result in a complete change in the accepted liability regimes and even the traditionally accepted insurance arrangements for such large vessels,” Holman Fenwick Willan partner Andrew Chamberlain told a Maritime London luncheon audience.

Chamberlain told the audience of salvors, insurers, shipowners and other maritime professionals that the salvage industry has limited and aging resources, is increasingly risk-averse, and has only four or five companies with global capability.

He noted that the legal environment for dealing with these types of incidents was becoming increasingly demanding with rising claims and disproportionately high clean-up costs. He said legal restrictions of the 1996 Protocol to the London Dumping Convention and the OSPAR Convention, combined with the absence of suitable recycling facilities, make it nearly impossible to dispose of a wreck.

“We have a global recession, high cargo values (relative to ship values), ever larger and untested ships, environmental concerns and increasing public and government awareness of the impact of shipping incidents,” Chamberlain said.

Recent high-profile container ship casualties have involved modest-sized container ships such as the MSC Napoli, which had a capacity of 4,688 twenty-foot-equivalent units, and the 3,352-TEU Rena. The largest container ships sailing today have nominal capacity of more than 15,000 TEUs.

Since the highly publicized 2007 casualty involving the MSC Napoli in the U.K., “any marine casualty is much more likely to be on the front page of every newspaper,” Chamberlain said.