61–70 of 202 posts
It’s amazing that the captain of such a large vehicle has through the results of their choices the capability to do so much harm
I agree: we allow people to be in command of thousands of kilos of metal, moving at up to around 30m/s, with really quite minimal training.
Earlier quoted context omitted.
There was no fault neglect or want of care. The engine failed. The ship was out of control. It was not bad maneuvering. It was not sleeping on the wheel. It was not want of care (it was piloted by a harbor pilot).
Why did the engine fail?
I have wondered what the insurance structure for this is and how liable the vessel's owners and insurers are for damage to public infrastructure. Marine insurance is one of the oldest types of insurance and antique in some respects, with large vessels covered by several underwriting firms. So potentially this is a massive financial hit for multiple companies if there is not a limit on liability.
It's worse (as in, more complex; better for the public, I guess) in that damages will be so big reinsurers are going to take a huge hit; they're probably not used to that.
Nah, the re-insurances actually are used to big hits. Munich Re, one of the biggest in the world if not the biggest, pays out billions of dollars a year from nature disasters [1].
[1] https://de.statista.com/statistik/daten/studie/200297/umfrag...
This is actually a really interesting case. Hear me out, a little bit of devil's advocate maybe.. If insurance company is forced to repay the whole cost of the rebuild, estimated it will cost lets say $600M. Tax payer is happy they're not paying via Federal taxes. But, shipping and logistics insurance companies start to ramp up their premiums and those fees are passed on to, eventually, the consumer over the long ter…
Some form of this "but what about the consumer" argument is rolled out every time a corporation screws up. It's an incredibly effective way of deflecting responsibility by claiming to be acting in someone else's interest. My rebuttal is "moral hazard." Why should Boeing bother making planes that stay in the air if they can always count on a slap on the wrist and, in the worst case, a bailout.
I have wondered what the insurance structure for this is and how liable the vessel's owners and insurers are for damage to public infrastructure. Marine insurance is one of the oldest types of insurance and antique in some respects, with large vessels covered by several underwriting firms. So potentially this is a massive financial hit for multiple companies if there is not a limit on liability.
As a former property insurance broker whose clients had big claims ($100Mish) and worked around people who handled the real big claims ($1B+), I can't really tell you with any specificity of how this will play out. All I know is that it will be a huge mess, and the lawyers will argue in court for several years. Ultimately, someone will have to pay to rebuild the bridge. In the event of really big claims, it almost al…
Earlier quoted context omitted.
I suspect that the actual cost to rebuild the bridge will be far higher than that. Initial estimates of large public works projects are virtually always too low, and actual costs can easily be 5-10 times higher. There is a great book about this phenomenon (and how to avoid it) by Brent Flyvbjerg called "How Big Things Get Done".
> estimates of large public works projects are always too low, and actual costs can be 5-10 times higher. The most recent example I can think of is England's High Speed 2 going from £35b to (est) £170b: https://en.wikipedia.org/wiki/High_Speed_2#Funding
Earlier quoted context omitted.
There was no fault neglect or want of care. The engine failed. The ship was out of control. It was not bad maneuvering. It was not sleeping on the wheel. It was not want of care (it was piloted by a harbor pilot).
A bit premature to declare so, don't you think? What if it comes out that corners were cut regarding engine maintenance or something along those lines?
This is actually a really interesting case. Hear me out, a little bit of devil's advocate maybe.. If insurance company is forced to repay the whole cost of the rebuild, estimated it will cost lets say $600M. Tax payer is happy they're not paying via Federal taxes. But, shipping and logistics insurance companies start to ramp up their premiums and those fees are passed on to, eventually, the consumer over the long ter…
It might not be such a bad thing to increase cost of trans-oceanic transportation. Right now we’re shipping stuff that makes little sense no to produce locally simply because (cost of overseas labor + cost of transportation) Alternatively, I’d suggest that the premiums might not increase that much. Cost of insurance would be (cost of a claimable event)*(probability of such event). I’d hope the latter tends towards zero, significantly reducing the product of the 2.
We can also look at the potential impact of such a “new” policy on total insurance costs. Apparently, the Dali is able to transport 10k containers. And current shipping prices of $4,000 per container, that means that the cost of the trip alone is in the $40M range. If we take the lowest possible value of the goods, that’d be $40M and the arrival location. I’d argue that the probability of losing the vessel and its cargo is higher than that of hitting a bridge, especially if ports start deploying tugboats around their facilities
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What helps push down prices of bridges, is to not build them in US. Or at least, it always strikes me how outlandishly expensive infrastructure projects are in the US (for me coming from Europe, originally).
outlandishly expensive infrastructure projects are in the US As someone in Europe I wonder where this notion comes from. Just about every major (and several minor) infrastructure project I can remember in my lifetime, in any of the European cities I've live in, has been both late and wildly over budget
This is actually a really interesting case. Hear me out, a little bit of devil's advocate maybe.. If insurance company is forced to repay the whole cost of the rebuild, estimated it will cost lets say $600M. Tax payer is happy they're not paying via Federal taxes. But, shipping and logistics insurance companies start to ramp up their premiums and those fees are passed on to, eventually, the consumer over the long ter…
Let's just look at the boat insurance, because the bridge and the cargo all probably have different policies covering them with vastly different terms. Marine insurance is odd because it actually just sucks as a business to be in. Boats aren't cheap and they sink too often for normal companies to realistically make any profit. But we still need insurance on our boats, so the industry basically has created a big mutual insurance pool. There are like 8 or 9 insurance companies that are owned by the businesses that purchase their policies (this is the definition of a mutual insurance company). So when a big claim is paid out like this, the entire shipping industry bears the cost because these same companies essentially share the risk on all shipowner's policy. Shipowners can't complain too much - there is literally no one else who will sell them insurance so they have to do it this way (Not having insurance is a bad idea 99.9% of the time). The deal is not all bad though, if there is a good year with fewer claims, the shipping companies get some money back. And because the risk is pooled via mutual insurance companies, they keep appropriate stashes of money in case there is a bad year. Actuaries are tasked with figuring out how much money to hold on to at any given time so hopefully there is never a capital crunch.
Will this cost be passed on to consumers? Tough to tell. I'm stepping a bit out of my expertise here, but my inclination is that there won't be outsize costs put on consumers. Roughly speaking, since the entire industry bears its fair share of marine insurance costs on a company by company basis, if one goes up, they all go up. So if that means shipping a crate from China to USA is more expensive because the space on that boat becomes more expensive, then consumers pay more. What's that saying again? A rising insurance premium lifts all shipping costs? However, I don't think that consumers will unfairly be paying additional costs to get their goods because of the mutual nature of boat insurance. Furthermore, the company you transact with (say Wal-mart) may just eat the additional cost of shipping in their margins or force shipping companies to eat the cost instead. This is all assuming the federal government doesn't pay for the rebuild. I don't think the government will pay any substantial amount on this claim given how well insured all parties seem to be.