The Wreck of the APL Panama

To help those not familiar with logistics understand what happens in global maritime trade, I prepared the case study of the wreck of the APL Panama.

Full text of the speech.
It was December 25 2005, and a beautiful clear Christmas day. The waves on the Pacific were unusually quiet and the visibility perfect as Polish born First Officer Motusic waited on the bridge for Croation Captain Bronko to take over the helm as they approached the port of Ensenada Mexico. The APL Panama, (roughly the same size as the Titanic), was a container ship loaded with thousands of containers full of flat panel televisions, silken underwear, Apple Ipods, Nike running shoes, and Nissan automobile parts. With a tiny Burmese crew, she was completing her regular rotation from China, Japan and Taiwan, to ports in the United States and Mexico.
“It’s 5:00 pm and where is the captain”? Motusic mused from his lone position at the helm up on the bridge. He was uncomfortable being in the position of responsibility with a ship racing into port with no knowledge of the safe passage into the harbor. He had already made 2 calls to the captain’s cabin, but the drunken souse still hadn’t made it to the bridge.
They were less than 100 miles south of San Diego, and 1 hour early for their appointment with the port pilot who would guide them through the unpredictable channel into the harbor at Ensenada.
Feeling panicky, Motusic made a second call over the radio for the port pilot. He had no idea where the safe channel was, and his ship needed at least 50 feet of water in order to stay afloat. It was the port pilot’s job to come out from the port and meet every ship while it was still out in deep waters and help the captain guide it safely into port. Matusic was glad when the radio crackled announcing that the port pilot was coming.
At 5:42pm Captain Branko weaved and stumbled up into the bridge. Steadying himself and hanging onto the door, the Captain waited for the port pilot.
Port Pilot Ramírez said he was leaving the port to meet the vessel when they spotted the monstrous ship heading across the harbor's entrance channel and aiming straight for the shore.
“I saw the lights and I couldn't believe it, I just couldn't believe it,” said Ramírez. “I told the tugboats, 'Leave the port, because the ship is about to run aground.' ”
On Christmas day, Conelep beach was a beautiful deserted place. A few residents enjoyed the peace and tranquility. Seagulls wheeling in the sky, the music of the surf, were drowned out by the rumble of the APL Panama as she approached shore.

First Officer Motusic noted that the captain was slow to react as he pointed out the buoys marking the channel's entrance, and the arriving pilot vessel. "The captain was all the time looking ahead, and he said, 'I still cannot see the pilot. Where is the pilot?' I told him and pointed, 'Captain, there is the pilot, there is the pilot!' ". The captain gave the order "hard to port wheel"! Then, the pilot called and warned, "Captain, you are going to shallow waters,". Minutes later, the APL Panama drove headlong onto Conelep beach burying her bow 20 feet deep in the sand.
Testimony
In sworn testimony later, there were no equipment failures; only human error and possibly a little tequila that led to the grounding. At 6:12 p.m., on an evening with good visibility, light breezes, smooth seas, The APL Panama ran aground in the surf, off a wide sandy beach.
“The cause of the grounding was neither the wind, nor the current nor the visibility, nor the tide,” Port Pilot Ramírez said. “All of the conditions for entering the port were normal.”
"In my view it was too high speed," said Motusic. "My opinion is that the Capt. did not come to the bridge on time." Motusic's declarations and those of Captain Branko, paint a vivid picture of the half hour before the grounding and the desperately futile last-minute maneuvers.
Motusic, in testimony said he tried to call the port pilot on the radio from 4 p.m. to 5:30 p.m. "but without success." As they approached the port, Motusic said he called the captain twice from the bridge. But Captain Branko did not show up to take command until 5:42 p.m.
Under questioning from Ensenada's harbor master, Branko said it was his 4th time entering the Port of Ensenada, and that all the equipment on board was functioning. It was not until 6:05 p.m. that he realized the vessel was in danger, he said. Seven minutes later it ran aground.
As is the practice in ports worldwide, ships are required to enter the Port of Ensenada with a pilot on board. The pilot meets the vessel at an offshore location, 2 miles W. of the port entrance. Port officials say their records show the pilot was scheduled to meet APL Panama at 7 p.m. Capt. Branko, said the crew told the ship's agent in Ensenada at noon the ship would arrive at 6 p.m.

Consequences
Within days, 5000 people were laid off at a Nissan plant while they scrambled to find an alternate source of parts. Nissan’s just in time manufacturing process didn’t allow for ships to run aground.
As the days turned into weeks, tempers frayed. Sandra Newman, whose husband had accepted a transfer from Taiwan to a position in the Mequiladora region of Mexico had a container full of their furniture, household effects and baby clothes. “I need my stuff” Sandra fumed.
Flat panel televisions from China were to have been on the shelves for Christmas, but had been delayed in production by the lack of critical parts from New Orleans. But the storm that battered New Orleans had made it impossible. Now ocean shipping incompetence would add to the delays of a global supply chain.
But in ENSENADA, a party developed. The crowds gathered to gawk at the wounded giant occupying ¼ mile of their beach while salvage workers plotted ways to float the vessel. The surrounding scene evoked a crowded plaza on a holiday, with vendors selling candy, families sharing picnics, couples holding hands. "It was like a giant party that you don't need an invitation to," said Arcelia Paz. "It was like Mardi Gras." The Mexican Military had to be called in to keep order.

Salvage
Initially after the wreck, precious moments were lost because the ship's captain refused assistance. That would mean it was salvage” and would prompt a host of legal problems. The waves and currents were pushing the ship into the shore, and by the next morning, it was parallel to the beach and much more difficult to move. By this time 6 massive ocean tugs with a combined 80,000 HP were unable to budge her.
Other ideas for freeing the ship didn’t work either, and the world’s most powerful helicopter a Soviet MIL-26 was engaged to begin lifting the containers off the ship. Realizing that this would not go fast enough, a road and temporary quay were built out to the ship so that a massive crane could be installed to assist in removing the containers.
As the weeks turned into months, a massive dredging boat was brought in to start digging a channel alongside the ship to allow her to be refloated. Finally on March 10, after 75 days on the beach, the APL Panama came free. Because the grounding was ruled an accident, Captain Branko and First Officer Motusic were allowed to leave Mexico, but the Mexican equivalent of the Environmental Protection Agency, fearing damage to Conelep beach legally seized the ship as collateral for cleanup costs.
During the time the APL Panama was beached, the Queen Mary II, currently the worlds biggest and most luxurious cruise liner, paid a stop to Ensenada. Guests sipping champagne along the port rail could ponder the dangers involved in the shipping business.

Conclusion
Today, the APL Panama sits in Ensenada harbor where she intended to be on Christmas day. The lawyers are filing lawsuits apportioning blame. The containers that were on her have been removed. The auto parts have allowed Nissan to resume production, the flat panel televisions will be sold for Christmas next year. Sandra Newman has her furniture, but the helicopter lifting the container off the ship, dropped it while it was still 10 feet off the ground. This didn’t do the dining room suite any good. Sandra can be glad that it only fell from 10 feet.
The ILWU (International Longshore & Warehouse Union) found the plight of the APL Panama sweet revenge. Their dispute with US West coast ports had shut the nation’s shipping down for several weeks during the Christmas rush in 2003 until President Bush ordered them back to work. Because of this labor uncertainty and the fact that Mexico’s ports were not unionized, shippers had been diverting an increasing amount of their cargo into the United States via Mexico rather than using traditional West Coast ports like Los Angeles. The ILWU trumpeted the plight of the APL Panama as a reason shippers should come back to US West Coast ports. A job in the ILWU is one of the last few places where a blue collar worker can make over $150,000 per year. Of course in Mexico dock workers only make a fraction of that.
With her propeller damaged, and inspectors examining her to see if the massive forces involved in pulling her free have weakened her backbone, APL Panama isn't going anywhere soon. In addition, Mexican authorities won't allow the vessel to leave until the beach where it was stranded is restored.
Story books are full of legends of pirates and ship wrecks from bygone days. Even though ship wrecks today are much more massive, they don’t seem to have the same mystique.
So the next time you go to pick up a flat screen TV and find out the store is out of stock and won’t receive any more, you’ll know there is more to the story than the store clerk can tell you. Cargo Law, a publication of the international shipping community has only one thing to say. “Ship happens”.