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COVID-19 and containerships: the last straw on the camel’s back

Farheen

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Farheen Muhammed

Farheen is a second-year undergraduate reading Engineering Science at the University of Oxford. She joined Lloyd's Register Foundation for one week as a micro-intern. Using HEC's digital collections and other sources she analysed current safety challenges, to provide historical context as a means to discovering creative and meaningful solutions for modern-day issues. Farheen was fascinated by the Foundation's mission to engineer a safer, more sustainable world through an interdisciplinary approach that employs a variety of skills and occupations to achieve the best solutions for the modern world. This, alongside her passion for sustainability, cleaner energy and maritime engineering, meant this placement was the perfect fit!

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Tuesday, September 28 2021
Executive summary

The Hindsight Perspectives Project led by the Lloyd’s Register Foundation is grounded in the understanding that no idea, invention or occurrence is entirely new. Instead, every ‘innovation’ is fundamentally built up of components of history that, when put together, construct our future. With this in mind, our past can be seen as a beacon of light that empowers us with the opportunity to take lessons, whether they be from success or failure, and apply them to brighten the future and create a safer, more sustainable world.

One shipping challenge being faced today which global marine history could shed light on is the rising trend of transporting containers on the decks of bulk carrier vessels. Whilst the impact of the pandemic and its economic consequences may deem such methods of cargo transport as necessary in the short-term, the risks associated with shipping containers in this manner could result in loss of life and increased environmental damage. The maritime economy today is gradually recovering from the container shortages seen as a result of COVID-19, so that carrying containers on the decks of bulk carriers will no longer be a necessary consequence of maintaining global trade equilibrium in the long-term. However, this is unlikely to be the end of the containerisation challenge. Some within the shipping trade see transporting containers on the decks of bulk carriers as an opportunity for increasing economic revenue,1 whilst the rapid development of more sustainable ship propulsion methods (such as nuclear power) could be another trigger for seeing this trend recur in the future. Thus, a thorough study of the history of containership and the regulations that envelope this type of goods transportation may hold the key to understanding the necessary steps that the maritime engineering sector require to navigate this foreign ground. This blog and the accompanying rapid literature review are a summary of potential sources and initial thoughts that may offer useful guidance for the maritime industry to take forward.

Container shipping: The past and present

Containership has a long and fascinating history. Although containerised cargo was originally ‘invented’ as a concept in 1937 by Malcolm McLean, it wasn’t until the 1950s that more standardised container sizes and strengths were established. Before this time, goods were transported in boxes and crates of various dimensions, which made it difficult to predict shipping costs. In the 1960s, more regulations concerning container size and transportation were set out, and soon after, container ships became a fundamental part of the shipping industry. Today, 90% of the world’s goods are transported via shipping and there are 25 million shipping containers across the globei. Despite this, the COVID-19 pandemic resulted in a container shortage crisis that brought to the forefront the fragility of our blue economy and is still affecting shipping patterns worldwide.


This container shortage was a consequence of several phenomena. Typically, the fluidity of international goods transportation ensures that containers are constantly moved between ports, so that even though certain countries (such as China) export more than they import, an overall container equilibrium is maintained. When containers are in short supply in a particular country, the usual practise is to simply make more rather than to return empty containers.2 However, once the pandemic struck, lockdown measures across different parts of the world disturbed this balancing act, which was further disrupted by surges in consumption patterns as people worked from home and businesses stocked up in anticipation of increased demand. Reduced shipping capacity and more stringent hygiene measures across nations resulted in an uneven distribution of containers, so that many ended up empty in locations where they were not required.

"The world is still trying to play catch-up"
Institute of Supply Chain Management. 2021. The current container shortage; What happened and what’s next?3 

As a means to combat the decline in business, many companies have taken to carrying containers on the decks of other vessels such as tanker ships and bulk carriers. Swire Bulk, for example, was among the first dry bulk owners to move containers on its fleet alongside Pacific Basini. Solving the safety challenges associated with this method of container shipping is fundamental for the future as more businesses (e.g. Golden Oceani) begin to investigate the short-term economic benefits. Additionally, the fragility of the shipping industry exposed by COVID-19 must be tackled to avoid the hazardous consequences that we see today in the face of the unexpected future. This delicacy is not a novelty for the maritime industry, as can be de seen from the descriptions of “tightness” and strain in the Lloyd’s Register of Shipping Annual Reportsiv - unless this is internationally recognised, the shipping industry will continue to be an unprotected economy, which may impede on future maritime development.

A journey into the future

It is an inevitable truth that history will repeat itself to a greater or lesser degree, although this isn’t necessarily unfavourable; it unlocks the opportunity for us to take lessons from the past and achieve beyond what we previously thought was possible. In the case of containerisation, a study into the history of container ships and bulk carrier design could inform the development of safety regulations for more secure cargo transportation in the future. Additionally, detailed research into historic vessels that were the first of their kind or undertook similar journeys to the ships that we operate today may shed light on how to approach the challenges we face. For instance, the period elapsed between 1937 (when the first containers were developed) and the 1960s (when container ships were first operated) offers great insight to how other vessels today can be adjusted to safely carry containers on deck – a perfect example of this is the Ideal X, a tanker ship that was converted to carry cargo on its deck in 1956.4 Similarly, in the year 1967, containers quickly took over other methods for transporting cargo in the UK.5 This rapid growth of containerisation suggests that the maritime industry at the time may have dealt with container shortages, which could give an understanding of how we might want to approach this challenge today.

Uncovering the history of other modes of transportation could be equally as beneficial as reflecting upon the history of maritime vessels. A part of the reason why shipping today is so vulnerable is because we have no competing alternative to distribute cargo internationally at the same scale. Looking into the development of other modes of container transport on land before equivalent economies were formed could therefore unlock innovative solutions for solving the containership challenges in the modern world. The hindsight perspectives project can also be extended to more than just identifying past solutions for contemporary problems; it can become a means to recognise patterns in more recent history that could lead to future containerisation shortages as we see today. For example, the incorporation of more sustainable propulsion methods such as nuclear-powered vessels could spark similar challenges: a study in nuclear propulsion revealed that whilst the reduced carbon footprint may unlock a more sustainable maritime sector, the “refuelling process would take about 30 days for a ship featuring a conventional PWR plant, under controlled conditions”.6 The incorporation of such vessels into global fleets will therefore require worldwide adjustment to ensure that container ship shortages as a result on refuelling do not result in the aftermath we see today.

Conclusion

The containerisation challenge that we face today will continue to be a relevant topic for study in the future of the maritime sector. It is therefore primary that we address this today, to ensure that the shipping industry can develop the tools required to unlock progress along the path to a more sustainable and robust industry. The findings documented here are just the tip of the iceberg, and the following rapid literature review records possible avenues for further research into the field of containerisation and on-deck container storage, as well as resources that could complement this study.

Take a look at Farheen's literature review for even more insights on this subject!

 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily represent those of the Lloyd’s Register Group or Lloyd’s Register Foundation.

Footnote hovee text

Footnotes

  • 1

    Chamber, S., 2021. Asian dry bulk owners take the lead in accepting containers on deck - Splash247. [online] Splash247. Available at: https://splash247.com/asian-dry-bulk-owners-take-the-lead-in-accepting-containers-on-deck/ [Accessed 14 September 2021].

  • 2

    UNCTAD.org. 2021. Shipping during COVID-19: Why container freight rates have surged | UNCTAD. [online] Available at: https://unctad.org/news/shipping-during-covid-19-why-container-freight-rates-have-surged [Accessed 14 September 2021

  • 3

    Institute of Supply Chain Management. 2021. The current container shortage; What happened and what’s next? [online] Available at: https://www.ioscm.com/blog/the-current-container-shortage-what-happened-and-whats-next/ [Accessed 14 September 2021].

  • 4

    Tozer, D. May 2011. [Container Shipping Milestones by Tozer], Lloyd's Register Foundation Digitised Internal Publications

  • 5

    Travel, Transport and Logistics, 2021. Container Shipping: the next 50 years. [online] Available at: https://www.mckinsey.com/~/media/mckinsey/industries/travel%20logistics%20and%20infrastructure/our%20insights/how%20container%20shipping%20could%20reinvent%20itself%20for%20the%20digital%20age/container-shipping-the-next-50-years-103017.pdf [Accessed 15 September 2021].

  • 6

    10th December 2009. [Research is focused on the application of nuclear propulsion to tankers, bulk carriers, container ships and cruise ships], Nuclear, Lloyd's Register Publication Articles Archives, Press Releases.

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