6 ms·

Does anyone know who pays for this process? I would imagine the owner of the ship, but I imagine there's a non-zero likelihood that something like this could ba

Does anyone know who pays for this process? I would imagine the owner of the ship, but I imagine there's a non-zero likelihood that something like this could bankrupt them. In that case... is there mandatory insurance or similar?

gnu8 6y ago
The insurers of the ship and/or cargo would be paying to salvage whatever value they can extract from the wreck, to reduce their losses. You’re right about the non-zero chance of insurmountable loss, which is why the owner of the ship and the owner of the cargo would both have a shitload of insurance. Read about Lloyd’s and the shipping insurance business. People have been doing this for hundreds of years.
- nradov 6y ago
  This salvage operation is far more expensive than the scrap value of the ship and cargo.
  - gnu8 6y ago
    Definitely, but it’s the difference between losing $100 million or $99 million. They’ve already sustained the loss, the only thing to do now is try and offset it.
  - SAI_Peregrinus 6y ago
    But less expensive than the fines they'd eventually accumulate leaving it there.
  - bluGill 6y ago
    There are also fines for polluting the water. It wouldn't surprise me if the harbor authority was also levying a daily fine for blocking access to the port.
- deleted 6y ago
  [deleted]
londons_explore 6y ago
Scrap steel is worth $0.20 per kg. There is 28 million kg there, so the whole ship is worth $5.6 million in scrap value alone. That probably pays for the operation.
- kevinherron 6y ago
  I doubt $5.6 million would even cover the salary of all engineers and workers involved. This operation began last year and won't finish any time soon.
- jandrese 6y ago
  That gantry alone costs more than that. All of the salaries and fuel costs and everything are way more expensive. However, the ship is a navigation and ecological hazard so it has to go. I have no doubt my tax dollars are helping.
112012123 6y ago
Depends on the jurisdiction. In many countries, yes there are insurance requirements. Even in ones where there aren't, most vessels owned by larger companies carry insurance for the same reason anyone else does. On the other hand, since oceangoing ships are (mostly) regulated by the countries they're registered in, which is frequently a regulation-light jurisdiction like Panama, Liberia, or the Marshall Islands - there are a surprising number of situations where the owner of the ship just completely disappears and the ship is left to rot. One of the most famous recent examples of this was the ship involved in the Beirut port explosion this year. After being impounded for being unseaworthy, it rotted at its moorings and eventually capsized in the Beirut harbor. A quick trip through developing-country ports on Google Earth will have quite a few ships like this.
- yohannparis 6y ago
  The ship in the article left Georgia to Baltimore, you cannot move goods from and to the USA with a boat that is not registered in the USA. That's is why only few cruise ship start and end their trips in the USA.
  - 112012123 6y ago
    Correct - vessels on US cabotage-restricted routes will always be registered (and crewed etc) in the US.
    - njarboe 6y ago
      The law keeps a fleet of US shipping vessels and seamen around, but makes some things in Hawaii quite a bit more expensive.
  - 0xffff2 6y ago
    Curiously, this vessel appears to have been registered in the Marshal Islands, which is an independent nation with a rather unusual relationship [0] to the US that I hadn't heard of before. Presumably the law that requires US registration has a special provision allowing this? I wonder if the crew requirements are more relaxed with a Marshal Islands registration? [0]: https://en.wikipedia.org/wiki/Compact_of_Free_Association https://en.wikipedia.org/wiki/Compact_of_Free_Association
ynniv 6y ago
According to Wikipedia the owner/operator is the $6B Hyundai Glovis, and the ship was insured. https://en.wikipedia.org/wiki/MV_Golden_Ray https://en.wikipedia.org/wiki/MV_Golden_Ray
- fblp 6y ago
  "Insurance losses on the ship are estimated at $70 - 80 million, and $80 million in its contents."
  - jamestimmins 6y ago
    That's substantially less than I would have expected. It means each car was valued at ~$20,000. I would have expected the ship itself to cost ~$250,000,000, but the HMM Algeciras, the biggest container ship in the world, only cost $140,000,000 to build. https://www.shippingandfreightresource.com/hmm-algeciras-largest-container-vessel-on-earth https://www.shippingandfreightresource.com/hmm-algeciras-lar...
    - HeyLaughingBoy 6y ago
      Merchant ships are actually pretty cheap. If you think about it, it's mostly steel supporting empty space and a really big engine. It's not at all unusual for the cargo to cost far more than the ship that's carrying it.

gnu8 6y ago

The insurers of the ship and/or cargo would be paying to salvage whatever value they can extract from the wreck, to reduce their losses. You’re right about the non-zero chance of insurmountable loss, which is why the owner of the ship and the owner of the cargo would both have a shitload of insurance. Read about Lloyd’s and the shipping insurance business. People have been doing this for hundreds of years.

nradov 6y ago
This salvage operation is far more expensive than the scrap value of the ship and cargo.
- gnu8 6y ago
  Definitely, but it’s the difference between losing $100 million or $99 million. They’ve already sustained the loss, the only thing to do now is try and offset it.
- SAI_Peregrinus 6y ago
  But less expensive than the fines they'd eventually accumulate leaving it there.
- bluGill 6y ago
  There are also fines for polluting the water. It wouldn't surprise me if the harbor authority was also levying a daily fine for blocking access to the port.
deleted 6y ago
[deleted]

londons_explore 6y ago

Scrap steel is worth $0.20 per kg. There is 28 million kg there, so the whole ship is worth $5.6 million in scrap value alone. That probably pays for the operation.

kevinherron 6y ago
I doubt $5.6 million would even cover the salary of all engineers and workers involved. This operation began last year and won't finish any time soon.
jandrese 6y ago
That gantry alone costs more than that. All of the salaries and fuel costs and everything are way more expensive. However, the ship is a navigation and ecological hazard so it has to go. I have no doubt my tax dollars are helping.

112012123 6y ago

Depends on the jurisdiction. In many countries, yes there are insurance requirements. Even in ones where there aren't, most vessels owned by larger companies carry insurance for the same reason anyone else does. On the other hand, since oceangoing ships are (mostly) regulated by the countries they're registered in, which is frequently a regulation-light jurisdiction like Panama, Liberia, or the Marshall Islands - there are a surprising number of situations where the owner of the ship just completely disappears and the ship is left to rot. One of the most famous recent examples of this was the ship involved in the Beirut port explosion this year. After being impounded for being unseaworthy, it rotted at its moorings and eventually capsized in the Beirut harbor. A quick trip through developing-country ports on Google Earth will have quite a few ships like this.

yohannparis 6y ago
The ship in the article left Georgia to Baltimore, you cannot move goods from and to the USA with a boat that is not registered in the USA. That's is why only few cruise ship start and end their trips in the USA.
- 112012123 6y ago
  Correct - vessels on US cabotage-restricted routes will always be registered (and crewed etc) in the US.
  - njarboe 6y ago
    The law keeps a fleet of US shipping vessels and seamen around, but makes some things in Hawaii quite a bit more expensive.
- 0xffff2 6y ago
  Curiously, this vessel appears to have been registered in the Marshal Islands, which is an independent nation with a rather unusual relationship [0] to the US that I hadn't heard of before. Presumably the law that requires US registration has a special provision allowing this? I wonder if the crew requirements are more relaxed with a Marshal Islands registration? [0]: https://en.wikipedia.org/wiki/Compact_of_Free_Association https://en.wikipedia.org/wiki/Compact_of_Free_Association

ynniv 6y ago

According to Wikipedia the owner/operator is the $6B Hyundai Glovis, and the ship was insured. https://en.wikipedia.org/wiki/MV_Golden_Ray https://en.wikipedia.org/wiki/MV_Golden_Ray

fblp 6y ago
"Insurance losses on the ship are estimated at $70 - 80 million, and $80 million in its contents."
- jamestimmins 6y ago
  That's substantially less than I would have expected. It means each car was valued at ~$20,000. I would have expected the ship itself to cost ~$250,000,000, but the HMM Algeciras, the biggest container ship in the world, only cost $140,000,000 to build. https://www.shippingandfreightresource.com/hmm-algeciras-largest-container-vessel-on-earth https://www.shippingandfreightresource.com/hmm-algeciras-lar...
  - HeyLaughingBoy 6y ago
    Merchant ships are actually pretty cheap. If you think about it, it's mostly steel supporting empty space and a really big engine. It's not at all unusual for the cargo to cost far more than the ship that's carrying it.