The Big Story Blog

The Big Story Blog: January 17, 2012 Archive

Tuesday 1/17/2012
Cruise ships and safety

Posted at 9:15 AM on January 17, 2012 by Paul Tosto
Filed under: Hed

Cruise ship tourism has exploded in the past decade. But the wreck of the Costa Concordia in Italy is raising questions about the overall safety of the giant cruise ships and the the training of those who sail them. We'll look today at the business and safety of the cruise ship industry.

With Italian wreck, questions of cruise ship safety

Posted at 9:26 AM on January 17, 2012 by Paul Tosto

20120117_cruiseship_33.jpg
FILIPPO MONTEFORTE/AFP/Getty Images

Cruise ship travel has grown dramatically over the past decade and the ships have become gigantic. But has the safety of the ships and the training of ship officers kept pace with the exploding growth?

That's that the question up for discussion as Italian authorities piece together what happened to the cruise ship Costa Concordia, which wrecked on the rocks off an Italian island over the weekend, killing several passengers.

Some, including a White Bear Lake couple, remain among the missing.

In the U.S., the cruise business has grown dramatically during some of the nation's toughest economic times.

When problems do arise, they're usually tied to food illnesses or other issues unrelated to the sea worthiness of the ship or the competence of the captain.

With global positioning satellites and other advanced navigation technology, ships aren't supposed to run aground. Initial reports show the Italian wreck may have been human error.

How will the Italian wreck affect the cruise business in the U.S. and abroad? Does the industry need to prove that safety and training have kept up with the jump in demand the past decade?

Stories of rescues, safety in wake of cruise ship wreck

Posted at 10:20 AM on January 17, 2012 by Paul Tosto

Lots of stories coming today from across the world on the Italian cruise ship wreck and its aftermath, including local stories on Minnesotans missing and rescued and the long term worries about the cruise ship industry.

Lakeville woman, sister had harrowing escape from ship. The Star Tribune this morning reports on two Lakeville sisters who were aboard the Costa Concordia but who got off the boat and safely to shore.

Church of missing Minn. couple praying for good news. MPR News reporter Annie Baxter writes that members of a Twin Cities Catholic church are praying for good news about their fellow parishioners, a White Bear Lake couple, who are the only remaining Americans yet to be located in the wreckage.

Have the cruise ships become too big to handle? The BBC posted an eye-opening story on how the cruise ships have become huge over the past decade, raising questions about whether safety procedures have kept pace with the increasing passenger load the big ships carry.

Some excerpts:

They have doubled in weight over the past decade, they sit higher in the water and are flatter underneath to enable them to enter more harbours. To the untrained eye they look top heavy, and with up to 6,000 people on board, they look difficult to evacuate quickly. But is that the case?

One maritime union, Nautilus International, thinks the regulations need looking at. It has been warning for some time that something like this might happen.

Look at this quote, which raises the spectre of the Titanic.

"The grounding of a cruise ship carrying more than 4,000 passengers and crew two weeks into the Titanic centenary year should serve as a wake-up call to the shipping industry and those who regulate it. Attention needs to be paid to existing evacuation systems and more innovative systems for abandonment."

What many people are keen to stress is that cruise ships are still among the safest ways to travel. Companies emphasise that training and regulations are rigorous and that this kind of accident is very rare. But no-one argues that there isn't room for improvement.

Carnival Cruise stock pummeled over Italian wreck

Posted at 11:06 AM on January 17, 2012 by Paul Tosto

While the captain of the cruise ship Costa Concordia is taking much of the blame for the cruise ship wreck along the Italian coast, financial markets this morning are punishing the ship's owners, cruise giant Carnival Corp.

Carnival shares lost roughly 14 percent of their value this morning when markets opened, the first trading day on U.S. markets since the Costa Concordia ran aground.

Several prominent stock analysts also downgraded the company's fortunes in the wake of the wreck.

Carnival Corp. is the parent company of Costa Cruises, which operated the Costa Concordia.

Carnival on Monday told investors the wreck may cost the company nearly $100 million:

The company has insurance coverage for damage to the vessel with a deductible of approximately $30 million as well as insurance for third party personal injury liability subject to an additional deductible of approximately $10 million for this incident. The company self-insures for loss of use of the vessel.

A damage assessment review of the vessel is currently being undertaken to determine how long it will be out of service. The vessel is expected to be out of service for the remainder of our current fiscal year if not longer.

For the fiscal year ending November 30, the impact to 2012 earnings for loss of use is expected to be approximately $85-$95 million or $0.11-$0.12 per share. In addition, the company anticipates other costs to the business that are not possible to determine at this time.

Cruise ship sinking an environmental wreck?

Posted at 12:42 PM on January 17, 2012 by Paul Tosto

20120117_cruise6_33.jpg
FILIPPO MONTEFORTE/AFP/Getty Images

Even as the human death toll from the Costa Concordia cruise ship wreck continues to rise, officials are increasingly worried about the potential environmental damage.

Carnival, the Costa Concordia's owner, has hired a salvage firm to remove the 2,400 tons of fuel on board the ship.

The New York Times reports:

The ship capsized within a 30,000-square-mile zone that is designated a sanctuary for marine mammals, and Italian government officials and environmentalists are worried that rough seas may further damage the ship and cause a fuel leak. Company officials said that so far all of the ship's 17 tanks are intact.

Mike Lacey, secretary general of the International Salvage Union, a trade group, said the salvage workers' task would be a little easier because most of the fuel is diesel, which is relatively light and will not have to be warmed before pumping. "It's not as bad as heavy fuel, but it can still make a mess," he said.

Calls begin for greater cruise ship regulation

Posted at 1:10 PM on January 17, 2012 by Paul Tosto

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AFP/AFP/Getty Images

U.S. Rep. Doris Matsui, D-Calif, helped pushed through legislation two years ago that toughened the reporting of crimes on cruise ships.

Today, without specifics, the congresswoman said the wreck of the Costa Concordia "shows that more needs to be done to protect cruise ship passengers."

The Cruise Lines International Association says cruise lines "meet and often exceed numerous international and federal codes and regulations designed to maximize the safety of passengers aboard ships."

Where do Minnesotans travel abroad?

Posted at 2:44 PM on January 17, 2012 by Paul Tosto

Stories today of Minnesotans aboard the ship wrecked Costa Concordia got us looking for data on where and how Minnesotans travel abroad.

We got some figures from Kathy Gerhardt at Travel Leaders Group, a Plymouth-based company with franchises across the country. representing roughly 30 percent of U.S. travel agencies.

Gerhardt sent us survey data on the top international destinations being booked by Minnesota Travel Leaders for 2012. Agents were asked to name up to five top destinations they've been booking for 2012; 61 owners, managers and agents from across the state responded.

It's not exact, but the chart suggests it's not that uncommon to find Minnesotans on a Mediterranean cruise.

RankTop Int'l Destinations (Minnesota) 
1Cancun, Mexico53%
2CRUISE - Caribbean41%
3Playa del Carmen/Riviera Maya, Mexico39%
4Paris, France25%
5Rome, Italy23%
6Punta Cana, Dominican Republic21%
7CRUISE - Europe (Mediterranean)18%
8Puerto Vallarta, Mexico16%
9Negril, Jamaica15%
10 (tie)Cabo San Lucas/Los Cabos, Mexico13%
10 (tie)Florence and/or Tuscany, Italy13%
12 (tie)Barcelona, Spain12%
12 (tie)Montego Bay, Jamaica12%
14 (tie)Ixtapa, Mexico10%
14 (tie)London, England10%

Steve Loucks with Travel Leaders Group said none of the passengers on the Costa Concordia were booked through the organization. While that ship is part of the Carnival Cruise Line family, "Costa has historically drawn passengers primarily from its European base," he said.

How will consumers respond to cruise ship wreck?

Posted at 4:38 PM on January 17, 2012 by Paul Tosto

The CBC posted an interesting story this afternoon noting that the wreck of the Costa Concordia could not have come at a worse time for the cruise industry during its peak booking period.

It includes this fascinating piece of reporting on the economics of operating cruise ships explaining why any deep discounts in cruise fares may be short-lived

... even extensive discounting on fares may have few effects on the earnings of a highly profitable industry.

That's because the industry's profit doesn't come from fares, (cruise industry expert Ross) Klein said, as much as it does from onboard revenue, "from what people spend on going on tours, from onboard the ship at the bars, the casinos, the shops and so on."

"A cruise ship is earning in profit per passenger per day more than $50 just for onboard spending," Ross said.

Those profits have spurred a massive growth in the cruise line industry. The Italian tourism think tank Risposte Turismo estimated the number of cruise passengers globally has grown from half a million in the 1970s to 19 million in 2010.

About Paul Tosto

Paul Tosto

Paul Tosto writes the Big Story Blog for MPR News. He joined the newsroom in 2008 after more than 20 years reporting on education, politics and the economy for news wires and newspapers across the country.

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