The shipping industry has largely proved resilient to the COVID-19 outbreak, says Allianz. However, a sharp economic downturn and difficult operating conditions present a unique set of challenges.
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.
The frequency and cost of collision, grounding and fire incidents has increased in some areas for Asian-based ship owners and managers, but the number of total losses as a whole has reduced significantly over the past 12 months, said Allianz in its recent Shipping and Safety review 2019.
While the growing use of connected technology in the maritime is expected to be a positive for both safety and claims, technology also means cyber risk is a big concern for shipping. As more and more systems require connectivity with the shore, so vessels become more vulnerable to a cyber-attack, says Captain Rahul Khanna from Allianz.
A growing number of goods are being transported by sea and in containers, including electronics and, increasingly, chemical products. However, dangerous goods are not always properly declared, which can have dire consequences, specially when considering the trend of larger vessel sizes, according to Allianz.
The trend of the increasing size of ships creates more safety, as the frequency of shipping losses overall has steadily declined over the past decade. However, the cost of incidents has been increasing, driven in large part by the cost of claims involving large vessels, Allianz said in ts recent Shipping and Safety Review for 2019.
Machinery failure (including engine failure) has risen as the top cause of shipping incidents over the past decade, a trend that is unlikely to change anytime soon, given rising repair costs and concerns over maintenance levels and larger vessels, said Allianz (AGCS) in its latest Shipping and Safety review.
In its latest Shipping and Safety Review, Allianz discussed how the changing weather patterns observed in the last years are disrupting supply chain, resulting in physical damage shipping incidents. The report cited recent examples, such as record low water levels on the Rhine and Elbe rivers and high water in Mississippi.
In its annual Shipping and Safety review, Allianz reiterated that human error remains a key safety issue and an underlying factor in many claims, meaning the quality of crew and ship owners’ overall safety culture are of increasing importance to risk assessment.
In its Shipping and Safety Review for 2019, Allianz provided an overview of the top ten largest ships lost in 2018. The largest ship lost in 2018 was the explosion and sinking of the Iranian tanker ‘Sanchi’ off Shanghai in the very first days of the year.
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