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Cost drivers in large casualties

Spinnaker's chairman Phil Parry went to the Swedish Club AGM last week – one of the most highly sought-after events on the shipping calendar.

It was some coincidence that one of the themes of the AGM was the cost implications of large casualties, on the day the MOL Comfort container ship broke in two off the coast of the Yemen.

The keynote speakers – Andrew Bardot, Secretary and Executive Officer, International Group of P&I Clubs and Stephen Tierney, MD of TMC – spoke on cost drivers in large casualties, with Mr Bardot presenting the IG's findings and conclusions from research into a number of major casualties. Such casualties can bring in mind-boggling figures; the Costa Concordia alone is believed to have created a £1bn insurance claim.

The MOL Comfort had just 4,500 containers on board; what about the new wave of Triple-E ships that can carry 18,000 teu? These new ships will be made of 52,000 tonnes of steel. A salvage operation can remove 50 tonnes of steel on a good day – try to picture the scale of such an operation.

Both Andrew Bardot and Stephen Tierney also touched upon the fact that there are two main areas which drive cost one way or the other; technical (weather, location, difficulty) and political (authorities' interest, what should be done compared with what should be seen to be done, and public pressure).

The Swedish Club and Mr Tierney sure know their onions – they handled the case of the stricken ship RENA that grounded off the coast of New Zealand in 2011. And while we’re talking mind-boggling figures… an estimated $10m has been spent recovering just 35 containers from the seabed at the insistence of the local authorities, and a further $10m spent removing 'nuisance' 2.5mm plastic beads from beaches. We couldn't believe the numbers either…

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