On April 15, 1912, a deadly combination of human error, engineering issues, hubris and fate conspired to bring down the Titanic—a state-of-the-art passenger ship that was touted as “unsinkable.”
It’s been almost 100 years since that fateful day. But although risk management and technology such as radar and GPS have improved the odds, the maritime industry still faces unique challenges driven by the continued growth of worldwide shipping and the cruise ship industry.
We spoke with risk management experts on how the Titanic disaster could have been averted with modern risk management techniques. Click "next" to see their responses.
Tim Donney, Global Head Marine, Risk Operations, Allianz Risk Consultants
Prior to 1990, regulations were only related to vessel construction, maintenance, repair and engineering fixes. Now there is a focus on company management and human factors such as policy and training in procedures on the ship, and shoreside-management responsibility toward ship operations. The U.S. Coast Guard develops safety standards within the U.S., technically applying only to U.S. vessels, and The International Maritime Organization (IMO), which is a U.N. organization, develops regulations for maritime shipping. The maritime industry has been driven be shipping disasters. The safest are oil vessels; The Oil Pollution Act of the 1990s was a response to the Exxon Valdez spill and implemented local standards, and the coast guard was considering a double hull. One of OPA’s provisions was that any new builds would have to have double-hull construction, and even existing vessels would have to be retrofitted within 20 years.
You must take enterprise risk management and put a maritime slant on it. If you take ERM as a manufacturer and include the maritime portion of that in the logistics chain, you can see how it becomes complex: As a shipper, how do I control my logistics chain when I don’t know how it’s regulated and when my inventory is on the ocean? If your vessel goes down, you’re also losing clients.
John Barnwell, global marine head, Americas, Allianz Global Corporate & Specialty (AGCS)
Even with the premier costs and technically advanced vessels, there is still the potential for major losses or large disasters. Risk managers have to take into consideration the unthinkable, even with the recent grounding and near sinking of the Costa Concordia. These are rare but when they happen, the results are catastrophic, have a financial impact to the company and damage the brand name.
Our best chance is to continue improving maritime safety, as most accidents are related to human error. We must focus on human factors.
The Coast Guard produces regulations for everything from 20-foot Boston whalers to supertankers and everything in between. Regulation negotiations, or “reg negs” as we call them, are a very slow process, so the process is not going to save you. When we tell people to look at the particulars of hull risks, we are not impressed by those who say they follow “all applicable regulations” as they are required to this by law or they will not operate. What people should do to be proactive is to have their own safety management system that uses the regulations as a baseline and build from that.
Barry Tarnef, senior loss control specialist, Chubb
I’m not a proponent of applying what we know now to what happened 100 years ago because the state-of-the-art is different today. But my question to White Star Line would be: What was your idea of a worst-case scenario? What was your maximum possible loss?
There are a number of accident causation theories on how to look at losses, determine the root cause and use that information to put appropriate physical and procedural loss control measures in place. In the case of the Titanic, we would have started with engineering and looked at the most vulnerable part of the ship, its systems and operations. For instance, there was one boiler compartment that when breached ultimately made the sinking inevitable. There were also the watertight bulkheads that only went up 10 feet. On other vessels of that time the bulkheads were as high as 30 feet—but the trade-off for these higher bulkheads included additional weight, decreased speed and higher costs. At the time there was great competition among liners making transatlantic voyages, so speed and reliability were important—thus, the lower bulkheads on the Titanic.
The Titanic didn’t have enough lifeboats for the number of passengers and crew on board so that created an untenable situation in a worst-case scenario. While better lifeboat drills would have helped, the fact remained that there was a lack of lifesaving equipment that no training and execution could ever have overcome.
Maritime catastrophes still occur, and even though we now have sophisticated weather routing and navigation electronics, the unexpected happens. However, some theories of accident causation point to human error as a major factor in many accidents. Education, experience and training are also risk management elements that we need to factor into the operation of a vessel. Our goal would be to minimize the vessel’s vulnerability because you are limited as to what you can do about the human aspect.
Steve Lako, Vice President, Global Loss Control, Allied World
It is not so much about modern risk management steps. It is about a much greater and unwavering commitment to safety. Let me focus on two areas, ship speed and lifeboats.
It is important to understand a little bit about the industry at the time. Shipping was a cut-throat business and safety was sacrificed for speed and luxury, competitive advantages which brought bragging rights and pride. Many historic shipping disasters were caused by ships traveling at full speed in bad weather and running up onto rock and other formations. In fact, 40 years before the Titanic, the White Star Atlantic, traveling at full speed, at night in perfect weather, ran up upon a well-known rock formation and 500 lives were lost. Better design would not have saved these ships.
The Titanic was an enormous ship. From bow to stern it was almost 900 feet long, which was larger than the biggest skyscrapers of the time and together with her sister ships were the biggest ships ever made. With this size, the ability to maneuver was not as great. During the voyage the Titanic received many reports of icy conditions but continued on at full speed, which was standard practice at the time. Lookouts were the only way at the time to spot an iceberg. They did not have binoculars and by the time they spotted the iceberg it was too late. So the biggest ship in the world, which was not as maneuverable as smaller ships and was traveling in icy conditions, was still moving at full speed. The issue of speed under these conditions needed to be evaluated before the voyage. This may have prevented the disaster.
Now let’s look at emergency preparedness. The Titanic by design could handle up to 64 lifeboats. This would have been enough for 4,000 people and well beyond the 2,201 people on board. White Star elected to have only 16 lifeboats and four collapsibles. This would accommodate only 1,178 people but would use up far less luxury deck space. White Star was fully compliant with the regulations of the day. White Star traded off safety for luxury and aesthetics. Compliance should never be your risk management standard. Regulatory compliance should be a part of an overall risk management plan and be one of many guidelines used in developing appropriate standards. Safety is never a tradeoff item.
A.V. Riswadkar, product liability director, Zurich Services Corporation
There were many lessons, from the "flawed" ship design to the quality of rivets; but analysis of a few key ones shows that the combination of competitive business pressures and inadequate emergency response crew training resulted in compromising of risk management efforts. The potential for human errors assured that the voyage of Titanic was a “disaster waiting to happen.”
These lessons later led to the establishment of International Convention for the Safety of Life at Sea (SOLAS) for maritime safety requirements and International Ice Patrol of North Atlantic shipping routes.
A number of safety and technology features were originally planned but were later compromised due to focus on greater profits with disregard for safety. Citing increased costs, the ship’s owners resisted the British Board of Trade’s consideration of upgrading lifeboat regulations based on the number of passengers onboard instead of ship’s tonnage, which resulted in far fewer lifeboats for rescue.
The competitive business pressures to complete the voyage in shorter time than the competition meant keeping up the 25 mph speed in a shorter route but traversing through a hazardous iceberg alley. Lack of a shakedown cruise or lifeboat emergency drill prior to its maiden voyage and unfamiliarity of crew with spotting and handling lifeboats resulted in ineffective emergency rescue operations.
There were also major communication failures. Instead of prioritizing the receiving and relaying warnings of visual sighting of icebergs from other ships, the ship’s radio channel was busy sending personal messages for socialites and first-class passengers. As the ship was sinking, the SOS distress messages for help were telegraphed; but due to lack of continuous radio monitoring and the newness of telegraph technology, they were not acknowledged as received by other ships. Initial disbelief and delay in assessing the gravity of the situation resulted in the crew’s failure to communicate the urgency of danger.
The passengers in third class, many women and children, were denied access to lifeboats and ineffective evacuation and ensuing chaos led to underutilization of available lifeboat capacity.
Today, there are more technological advances in ship building, communication systems and more maritime safety regulations. The lessons learned are not for shipping industry alone, they apply to any business operations or a large project.
So could another Titanic disaster occur be avoided? The answer can be affirmative only if we ensure that the competitive business pressures do not compromise the prudent risk management and the lessons of Titanic are not forgotten.
Sarah E. Pacini, vice president of risk management and insurance, Advocate Health Care
I think it goes with the old adage, “slow and steady wins the race.” This is especially relevant to the fall of the Titanic—and especially when it comes to listening. At the time, there were lots of people voicing their concerns, especially to front-line leaders. In today’s environment it is important to listen to our leaders and have them listen to concerns when determining the trajectory of your organization.
Kevin McPoyle, CIC, President and co-founder, KMRD Partners, Inc
One modern risk management step would have been a communication requirement among the crew, particularly the decision makers, regarding the decision to choose "speed over ambition.” As history tells the story, the crew was encouraged to "go fast" to set a trans-Atlantic crossing record. The captain ignored reports of an ice field on the chosen route, because it was the best, fastest route. As a result, the captain assumed more risk than was required to arrive at the ship’s destination in New York City.
Modern risk management requires firms to have a disaster recovery plan on file. Because the Titanic was considered to be unsinkable, she was outfitted with only enough lifeboats for half of the passengers. In addition to there being an insufficient number of lifeboats, the crew was insufficiently trained regarding their use.
Having a prepared disaster recovery process would have saved lives after the bad decision regarding the course that had been chosen. The shortage of available lifeboats and the speed with which the ship sank compounded the lack of direction and process. Every organization in modern American commerce should have a disaster recovery plan on file. What’s more, it should be tested frequently—at least annually. Had the crew of the Titanic had a disaster recovery plan on file and tested it, the ship would not have departed England short of lifeboats.