While Maritime Risks Soar, Total Losses Plummet in '23 - Report
It was only 30 years ago when maritime lost approximately 200 large vessels per year. Despite the mounting risks to shipping globally, its safe to say that safety measures and technology put in place in the interim have paid off, as in 2023 the industry saw 26 large ships lost -- down from 41 a year earlier and the lowest total ever, according to the Allianz Commercial Safety and Shipping Review 2024.
While the ship loss numbers continue to fall, the industry still has a significant risk profile.
“The speed and extent of the way the industry’s risk profile is changing is unprecedented in modern times. Conflicts such as in Gaza and Ukraine are reshaping global shipping, impacting crew and vessel safety, supply chains and infrastructure, and even the environment," said Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Commercial. "Piracy is on the rise, with a worrying re-emergence off the Horn of Africa. The ongoing disruption caused by drought in the Panama Canal shows how the changing climate is affecting shipping, all at a time when it is having to undertake its most significant challenge, decarbonization.”
Some interesting findings from the latest Allianz report:
- Southeast Asia is the hot spot for losses: Cumulatively, there have been more than 700 total losses reported over the past decade (729), with the South China, Indochina, Indonesia and the Philippines maritime region recording more than 25% of the losses with 184.
- Shipping 'incidents' are down, too, but fire risks loom large: The number of shipping incidents reported globally declined slightly last year (2,951 compared to 3,036), with the British Isles seeing the highest number (695). Fires onboard vessels – a perennial concern – also declined. However, there have still been 55 total losses in the past five years, and over 200 fire incidents reported during 2023 alone (205) – the second highest total for a decade after 2022. Fires remain a key safety issue on larger vessels given the potential threat to life, scale of the damage, and the fact associated costs can be severe, a factor contributing to the long-term increase in the cost of large marine insurance claims.
- War: Global conflicts, let by Russia's war in the Ukraine and the conflict in Gaza have demonstrated the vulnerability of global shipping to proxy wars, disputes and geopolitical events, with more than 100 ships targeted in the Red Sea alone by Houthi militants. Disruption to shipping in and around the region persist as shippers take the long haul around Africa, and piracy threats re-emerge off of Somalia.
The Allianze report also said that in the three years since Russia invaded Ukraine the gradual tightening of international sanctions on Russian oil and gas exports has contributed to the growth of a sizable ‘shadow fleet’ of tankers, somewhere between 600 to 1,400 vessels, ships operating outside of conventional international regulation and posing a unique threat now and in the future.