Thursday, June 23, 2022

Coffin Ship

A coffin ship is a ship that is designed to sink, for insurance purposes.

A recent article online details the perils of a floating restaurant from Hong Kong.  It was a famous place, little more than an elaborate Chinese-styled building on a barge.  But the pandemic came and it had to close down for a couple of years and the owners started hemorrhaging cash.  They decided to have it towed to another location for repairs and a storm came up and it sank.  Oh, gee, too bad!

Of course, many observers wondered whether the sinking was intentional - an insurance scam.  The floating restaurant is an albatross around the owner's necks - it could not be easily scrapped and it would cost too much to repair and likely would never reopen due to the pandemic.  So you sink it and claim the insurnace proceeds, right?

It is an old game.  If you are like me and like to watch ship videos on YouTube or read about the fate of certain ships on Wikipedia, you might notice that an awful lot of ships never make it to the scrap yards of Bangladesh.   The ocean bottom is littered with the carcasses of old ships - and inland lakes and waterways have their share as well.   A typical Wikipedia entry ends with, "The ship was renamed [insert weird name here] and sold to new owners.  It was being towed to Chittagong, Bangladesh for dismantling when the towline snapped in a storm and the ship sank in 5000 meters of water and declared a total loss."

It happens so often you have to wonder whether these towing companies are paid extra to tow the hulk out into a typhoon or whether they just open up the scuppers and saw the towline and let it sink.  After all, the insurance payout might be more than the scrap value at that point.

Apparently, this was not a new thing, either.  Back in the day, "coffin ships" were sent to sea with the idea of sinking them.   An older wooden sailing ship, rotted to the keel and full of shipworm and decay, would be painted up smartly and then renamed and sent to sea with a full crew.  The ship would then fall apart in a storm and sink with all hands - and the owners would pocket the insurance money.  It got so bad that Lloyds of London noted that it appeared that no ships were ever scrapped when they wore out.  They all just sank.

Even in the more modern era, this seems to be the case.  Much ballyhoo was made of the Edmund Fitzgerald because of a Gordon Lightfoot song.  But the reality of the "lakers" was that these were essentially disposable vessels - like an aluminum beer can - whose contents were worth more than the container.  The insurance claim for the cargo of the Edmund Fitzgereld (or any one of the hundreds of lakers that line the bottom of the Great Lakes) was more than for the vessel itself, which was worn out, ready for a complete overhaul (or scrapping) and inexplicably sent out into one of the worst end-of-season storms in history - when most other boats had been laid up for the winter.

The value of the crew was less than the ship itself - in fact trivial.  Their families were paid out nominal amounts and the next boat was crewed by yet more desperately poor people from rural Michigan.  Next!

This trend continued even to relatively recent modern times.  And Austrian businessman put a bomb onboard a cargo ship, after he loaded it up with containers full of worthless scrap iron, which he had over-insured as "uranium mining equipment" and then tried to collect $20M in insurance proceeds when the ship sank, killing half the crew.  Oddly enough, several Austrian government ministers were caught up in the scandal, as they had participated in the scam by certifying the cargo and obstructing the subsequent investigation.

And like I said, it seems a lot of worn-out ships tend to sink when being towed to the scrap yard, the tugboat company inexplicably sailing right into major storms, the tow-lines snapping as the derelict ship takes on water (because someone conveniently left a hatch or port open).

I suppose we are making progress with coffin ships - no longer are we sending sailors out to their deaths in these aptly named floating coffins.  Rather, we let them sink under tow and then scam the insurance companies.

So I guess that is progress.