Super Tankers, Security at Sea


The newest generation container ship costs about $190 million and has the capacity to carry about a billion dollars worth of cargo. The prospects of a huge loss present a considerable underwriting challenge.


“Certainly when we look at container ships today size does matter.”


Sean Dalton, Zurich


The expansion of the Panama Canal, due for completion in 2014, will allow for passage of more ships and larger vessels. Maersk Line’s move this year to purchase 20 Triple-E class ships set a new standard for size and fuel efficiency. The Triple-E ships, which will be delivered in 2013 through 2015, have the capacity to carry 18,000 TEUs (which stands for 20-foot equivalent units). Translated, that’s the equivalent of about 9,000 over-the-road tractor trailers. Though the frequency of losses has fallen, the potential for a ship this large with so much high-value cargo to experience a grounding or a fire at sea creates understandable concern among marine underwriters.


At the annual conference of the International Union of Marine Insurers, the issue of bigger vessels was a major topic of discussion. One concern is that ports may not have the capacity to handle the larger vessels. Another is the cost of offloading large vessels in the event of a grounding or salvage situation.


Copyright © 2011 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.


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