Suez opened – Questions around monster ships remain

Private gain vs. public pain

Helped by a high tide, MV Ever Given was freed from the Suez Canal shallows yesterday at 3pm local time after two heavy-pull tugs arrived and thousands of tons of material were dredged away. 

After a week in which the massive container ship was lodged between two banks and under maximum stress - with maritime experts worrying it could break at the sagging center - the stern was freed early Sunday and the bow later in the day. Finally coming on the scene Sunday were tugs capable of anchoring to the bottom and exerting pulling force four times or more greater than most of the tugs on site. By this morning the ship had arrived at Great Bitter Lake mid-canal where the hull could be examined for cracks. Bow and stern compartments had been taking on water.

Now the questions will come. Why did the Suez Canal Authority not have rescue tugs on station for incidents like this? How prepared were authorities for the emergence of the new mega-ships, capable of carrying 20,000 and more containers?

In a broader sense, the Suez crisis shines a light on what maritime historian Sal Mercagliano, a merchant marine veteran, calls “a hidden industry” and its impacts on waterways and ports as well as port communities and workers.  A powerful shipping industry has been dictating terms, based on its own economic calculations, and shunting costs off to the public. Taxpayers have been paying for expensive dredging and port upgrades. Communities have been subject to increased pollution and accidents from drayage trucks hauling containers, with drivers working under brutal conditions. And the global economy just suffered $10 billion in blocked trade each day for the last seven. It’s a large topic beyond the scope of a single post, so I will try to hit the high points. 

EXPLOSIVE GROWTH OF MEGA-SHIPS

Container ships are putting on bulk faster than any other class of ship.  Between 1996-2015, the average size grew 90% to 8,000 TEU, twenty-foot-equivalent units, the boxes. That was before the real monsters became coming off the stays.  The first 20,000-box ship was completed only four years ago this month. Since then, dozens of these mega-ships have been completed. Now dozens are plying the world’s oceans, and at least 10 are currently on order. Some range close to 24,000 TEU. This graph reveals the explosive growth of the largest vessels. 

The trend is bigger because economies of scale reduce costs for shipping companies.  The charts on p. 25-6 of this OECD document show just how compelling are the economics. For instance, on a voyage of 21,000 nautical miles, at a typical sailing speed of 24 knots, savings could be over $120 per box on a 15,000 TEU ship compared to one with an 8,500 TEU capacity.  Going up another 4,000 boxes to 19,000 could increase savings another $75. At $195 a box and an 85% load rate, that amounts to over $3 million per voyage. No wonder sizes are going up.  There are some indications the process is reaching a law of diminishing returns, and whether container traffic is strong enough to support ever larger ships. The industry may be pulling back a bit. Even as the Ever Given sat sideways in the canal, owner Evergreen confirmed its latest order was for 20 15,000 TEU ships. Smaller, but still with massive impacts.   

AN ACCIDENT WAITING TO HAPPEN?

Captain George Livingstone, an experienced Bay Area pilot, puts the greatest challenge of the mega-ships in perspective. At around 1,300 feet long, container ships such as the Ever Given are around a quarter longer than their equivalents averaged in 2006. But closing in on 200,000 deadweight tons, they are nearly four times heavier.  

“. . . professionals operating these class of ships will continue to ask ourselves, how big is too big? It would be irresponsible to stop asking. Few mariners want to discourage commerce but we want that commerce to be safe, it’s in our own interest. The international marine transportation business does not operate in a vacuum, there should be discussions at the highest levels . . . regarding reasonable safe limits on container ship size.” 

Livingstone is regarded as one of the world’s greatest pilots, people who take control of ships when the enter ports or limited waterways. He notes, “The challenge in safely handling this class of ship is the combination of weight and area – it’s off the scale – all the more reason kudos are deserved to those operating them. Professional skill, however, cannot overcome physics. There are physical limits to safely handling this class both at sea and in harbors and waterways. Wind, swell size and current are singular factors with this class. In the case of the Ever Given, her wind area is roughly 20,000 sq meters. The largest Clipper ships with full sail out had about 5,000 sq meters of sail out . . . “

Livingstone puts the “billion-dollar question . . . how did this happen? What impact does it have on global trade? The ship itself, Ever Given built in 2018, (is) part of a decade long, world-wide trend of building Ultra Large Container Vessels (ULCV) based on economies of scale. The original idea was to reduce the cost of transporting containerized cargo through physically larger vessels. The more containers, the cheaper the cost of moving them. Not a bad idea, but an idea that certainly called for testing and planning far in advance of any actual construction, right? Although innovative and credible, was the planning and construction of this new class of container ship pushed through and implemented with too little thought?”

The veteran pilot clearly implies the answer is yes. An industry seeking to cut costs and increased profits pushed a new class of ships for which the world was ill-prepared. The cost to world trade this past week was around $70 billion in delayed shipments and long-term disruption to global supply chains.

WORST POSSIBLE PLACE

Captain Nick Sloane, one of the world’s leading salvage masters - he refloated the Costa Concordia cruise ship which sank off Italy in 2012 - puts the Suez blockage in perspective. It took place at the southern entrance of the canal, one of its narrowest points. The enormous ship ran aground in “just literally the worst part of the canal it could happen.” (See video linked to yesterday’s post.) 

Dredging only opened the canal to the larger container ships in 2015 when a new canal channel was also completed, allowing two-way traffic. Egypt opened the “New Suez Canal” in hopes of increased revenues that have not quite materialized. They even declined in the past pandemic year. 

Unfortunately, Ever Given grounded south of the V where the second channel started. A sudden dusty wind blowing against the towering ship is given as the proximate reason. The dredged channel at the center of the canal only left around 30 feet of leeway on either side. A wind gust hitting a ship of mammoth size and obscuring visibility would challenge even the most experienced pilot.  

Authorities also believe human error might have played a part. That would not be surprising. The pandemic has kept hundreds of thousands of sailors at sea beyond their contract. Ports have not allowed them off ships, and the industry has not taken sufficient steps to get them back home. It’s called the seafarers crisis.  Crews are getting weary, even as ship sizes have increased crews have been cut in half by cost shaving measures, notes John Konrad of gCaptain, an industry news source. Twenty-five were on Ever Given. Konrad emphasizes that all ship functions are not controlled from the bridge. Crew members have to walk to different parts of the ship to turn valves and such. That can take minutes. (See Nick Sloane video posted yesterday). Crews are generally from poorer nations. Ever Given’s is Indian. Thus, broader questions must come to the fore about labor conditions in an industry bent on cost cutting.

Put it all together. A new class of mega-ships coming through the canal, challenging the skill of pilots and tired sailors, even as canal authorities fail to station adequate rescue equipment on site. As with so many elements of our world, corporate interests have outrun the adaptive capacities the overall system. Private gain has trumped public pain. 

PAIN COMES HOME

The clog in this crucial artery of global trade is clearing, sparing the world the economic equivalent of a stroke. But in ports across the world, the deluge of containers from increasingly large ships chokes highways and lungs.

Notes gCaptain, “When a mega containership like the Ever Given docks in the United States its over 20,000 TEUs of containers are dumped on our cities and the environmental and health consequences and road damage is enormous. Our poorest children are dying, climate change is accelerating, and bridges are collapsing under the weight of heavy cargo boxes. This problem is bigger because in a few weeks the Ever Given will disappear from Suez but our cities will continue to be forever choked with boxes.”

Drayage trucks that haul containers typically are highly polluting and run through disadvantaged communities. Seattle, where I live, has a major container port that showers Seattle’s poorest and most diverse neighborhoods with some of the worst pollution levels in the metro region, causing high levels of asthma and other pollution-related diseases. In ports from Newark to Oakland to L.A., the story is the same.  Environmental justice advocates are fighting from coast to coast. 

“Almost every family I know has someone suffering from asthma, respiratory health problems, lung disease, or cancer,” says Jesse Marquez, who founded the Coalition for a Safe Environment to push for pollution reductions at the L.A. port just four blocks from his home. “Our community is located in what is now called the ‘Diesel Death Zone.’” 

Last September environmental groups filed suit against the port, which handles 40% of West Coast and nearly a fifth of U.S. container traffic. They charged the port is giving environmental exemptions to China Shipping, which operates a huge terminal there. 

Drayage truck drivers are caught in the middle. They tend to be operated by lower-income people from ethnic minorities, often immigrants, who cannot afford upgrades. They work under exploitative conditions, as a tremendous USA Today investigation uncovered in 2017.

It is not just disadvantaged communities who are paying, but all port community taxpayers who must pick up the bill for extensive dredging projects needed to accommodate the monster ships. The figures of recent years are staggering: Miami - $205 million, Boston - $350 million, L.A. - $370 million, New York/New Jersey - $2.1 billion, Mobile - $365 billion, and Charleston, S.C. - $558 million. (See video below.) Seattle plans a major renovation and $60 million dredging project at Terminal 5 to handle fully-loaded 18,000 TEU ships. Today they can only come into port partially loaded because draft below water is limited.

Environmental costs are huge as well - disturbing sediments often saturated with toxic sediments, disposing of the spoils, ravaging natural ecosystems. Rachel Silverstein, executive director of Miami Waterkeeper, estimates the project there destroyed 560,000 corals and maybe twice that many across 250 acres. The city’s coral reefs provide not only biodiversity and recreation; they also protect the city from storm surge. In a world where climate disruption is driving more and bigger hurricanes, the potential costs are inconceivable.

Thus, the theme that pervades this survey carries throughout. Shipping companies seeking to cut costs by launching monster ships on the sea make everyone else pay the price, workers, disadvantaged communities, taxpayers, local ecosystems, the world’s fundamental maritime infrastructure of waterways and ports, and in the end, the global economy itself. Immensely powerful corporations are making bottom-line decisions benefitting their own interests, and putting the costs on the rest of us.  In all the crises we face, from climate to the pandemic, this pattern holds. It is time to re-think the system that produces these results, and challenge who has power in it. 

In the interests of brevity, I will hold the biggest questions of all until tomorrow’s post. What does the Suez crisis say about our dependence on fragile global supply chains? Should we encourage domestic production, and the re-localization of economies?