In 2019, Asian waters accounted for a third of large vessels lost at sea globally, despite the fact that large shipping losses remained at a record low by over 20% year-on-year. Meanwhile, the COVID-19 crisis could worsen the long-term safety improvements in the shipping industry for 2020 and beyond.
According to Allianz Safety & Shipping Review 2020:
- 14 large ships lost in Asian waters in 2019, accounting for more than 33% of losses worldwide
- Globally, 41 large ships lost in 2019, down by more than 20% year-on-year and almost 70% over a decade.
- Number of shipping incidents (2,815) is up, as are claims from machinery issues. Ro-ro vessel safety is a growing concern.
- Consequences of coronavirus and a sustained economic downturn could threaten long-term safety improvement and trigger an uptick in losses from cost-cutting measures, fatigued crew, idle vessels and weakened emergency response.
- Rising geopolitical tensions, emissions rules and de-carbonization targets, mis-declared cargo and fire incidents continue to pose risk challenges.
Specifically, in 2019, 41 total losses of vessels were reported around the world, down from 53, 12 months earlier. This represents an approximate 70% fall over 10 years and is a result of sustained efforts in the areas of regulation, training and technological advancement, among others. More than 950 shipping losses have been reported since the start of 2010.
Highlights:
- The South China, Indochina, Indonesia and Philippines maritime region remains the top loss location with 12 vessels in 2019 and 228 vessels over the past decade — one in four of all losses.
- The Japan, Korea and North China region saw 2 vessels lost in 2019 and is the third largest loss location overall with 104 since 2010.
- Cargo ships (15) accounted for more than a third of vessels lost in the past year, most of them in South East Asian waters.
- Foundered ships (sunk/submerged) were the main cause of all total losses, accounting for three in four (31).
- Bad weather accounted for one in five losses.
- Issues with car carriers and roll-on/roll-off (ro-ro) vessels remain among the biggest safety issues.
- Total losses involving ro-ros are up year-on-year, as well as smaller incidents (up by 20%) — a trend continuing through 202.
- The report notes the increase of smaller shipping incidents, with reported shipping incidents (2,815) having increased by 5% year-on-year, driven by machinery damage, which caused over one in three incidents (1,044).
- A rise in incidents in the waters of the British Isles, North Sea, English Channel and Bay of Biscay (605), meant it replaced the East Mediterranean as the top hotspot for the first time since 2011, accounting for one in five incidents worldwide.
- Incidents in the South China, Indochina, Indonesia and Philippines region also increased by 21 year-on-year for a total of 255 in 2019, making it the third highest region.
- About 200 reported fires on vessels over the past year, up 13%, with five total losses in 2019 alone.
- Mis-declared cargo is a major cause. Taking steps to address this issue is vital as it will only worsen as vessels become bigger and the range of goods transported grows.
- Chemicals and batteries are increasingly shipped in containers and pose a serious fire risk if they are mis-declared or wrongly stowed.
- In the meantime, 2019 saw a number of geopolitical battles and cyber crimes, which heightened the political risk and unrest globally; The events in the Gulf of Oman and the South China Sea impacted the industry and the feeling of safe navigation. In the meantime, piracy remains a major threat with the Gulf of Guinea re-emerging as the global hotspot, Latin America seeing armed robbery increase and renewed activity in the Singapore Strait.
- Increased number of GPS spoofing attacks on ships, particularly in the Middle East and China, while there have been reports of a 400% increase in attempted cyber-attacks on the maritime sector since the coronavirus outbreak.
- The aim to halve CO2 emissions by 2050 will require the industry to radically change fuels, engine technology and even vessel design. Since January 1, 2020 allowable sulphur levels in marine fuel oil were slashed.
- New technology not a panacea, but an increasingly useful tool: Shipping tech can be a positive for safety and claims and is increasingly being deployed to combat some of the risks highlighted in the report — from reducing the threat of fire on vessels through temperature monitoring of cargo to even potentially integrating suppression systems in drones in future.
- Increased use of industrial control systems to monitor and maintain engines could significantly reduce machinery damage and breakdown incidents, one of the biggest causes of claims.
COVID-19 risks and shipping:
The report notes the impact the pandemic has on the shipping industry, highlighting the risks arising:
- The inability to change crews is impacting the welfare of sailors, which could lead to an increase in human error on board vessels.
- Disruption of essential maintenance and servicing heightens the risk of machinery damage, which is already one of the major causes of insurance claims.
- Reduced or delayed statutory surveys and port inspections could lead to unsafe practices or defective equipment being undetected.
- Cargo damage and delay are likely as supply chains come under strain.
- The ability to respond quickly to an emergency could also be compromised with consequences for major incidents which are dependent on external support.
- The growing number of cruise ships and oil tankers in lay-up around the world pose significant financial exposures, with many of them anchored in typhoon-exposed areas in Asia or hurricane-exposed areas in North America.
To find out more about the report click here.
