Industry News & Tips

“Costa Concordia” disaster

January 23, 2012

Greg Knowler

 

When it comes to sinking cruise ships, size matters

by Greg Knowler

Jan 17, 2012, 10:14PM EST

Anger is mounting at the actions by the master of the Costa Concordia, but what if the growing passenger capacity of cruise liners is part of the problem?

 

Making money in shipping is all about economies of scale. Once the rates have been secured, the profitable operating of a giant vessel is simply a result of reducing unit costs.

By bringing down the cost per unit, a shipping company improves the margin of profit it earns on each unit. That’s why Maersk Line is building 20 container ships of 18,000 TEU.

 

And anyone who believes that ocean liners do not regard passengers as mere revenue-producing units should take a look around the inside of one of the floating shopping lines. There are more retail outlets of overpriced fashion brands than you would find at an international airport. Not to mention the casinos.

The passenger line business is expanding at an incredible rate, and unsurprisingly it is Asia where the big strides will be made in the next few years. At the first Asia Cruise Terminal Association meeting, held in Singapore this week, it was predicted that by 2015, the region’s cruise industry would carry seven million passengers a year.

This demand in Asia and across the industry has pushed out the orderbook to 2014 by which time 19 ocean going vessels will have floated into service. Most of the big ocean liners can only call at places like Laem Chabang in Thailand, in Singapore and at some Japanese ports, but that will change soon.

Shanghai’s cruise terminal will be opened later this year, and China is expected to be the one of the main contributors to the cruise business. Hong Kong is also constructing a new cruise terminal that will accommodate the largest liners when it comes online next year.

So the business has a bright future in Asia and all the major operators are aggressively chasing market share. The cruise window in most of Asia is narrow because of typhoon season from May to October and winter in the north, which means itineraries are jammed in the summer months. The Carribbean schedule is equally crowded.

This strong competition coupled with pressing demand is seeing cruise operators looking for economies of scale. That means they can carry more passengers, and more passengers mean more crew, which means more people to save if something goes wrong.

There were 4,200 passengers and crew on board the Costa Concordia when it went down, and the now ubiquitous Youtube footage shows the mayhem of trying to herd so many people into lifeboats on a listing ship.

It is worth bearing in mind that passengers are not sailors and have no idea of safety at sea. The only way they can be saved is to have participated in safety drills and if they follow the orders of crew when the abandon ship signal is given. Left to figure it out on their own, passengers will panic and people will die.

So paying attention to the location of safety exits and participating in evacuation and lifeboat drills is important. But what if cruise ships are simply becoming too large? No matter how well drilled 6,000 people are, if a vessel is sinking rapidly a lot of them will probably go down with the ship.

Of course, the answer is for the ship not to hit anything and that responsibility falls on the captain. But accidents happen, captains do stupid things like change course close to a rocky shore so the headwaiter can wave to his relatives. Not to mention bad weather and rogue waves.

Ultimately, safety is all about mitigating risk. Training for the bridge staff and ship’s crew is the best preparation for disaster, but even so, there is still a huge helping of “cross fingers and hope for the best”.

Statistics may show that cruising is perfectly safe, but before clambering up the gangway of a multi-storey vessel, maybe you should ask yourself this: Would you want to be passenger number 6,001 when your giant liner springs a leak in mid-ocean?