Large shipping losses have halved over the past decade, largely driven by development of a more robust safety environment by shipowners, according to Allianz Global Corporate & Specialty SE’s fifth annual Safety & Shipping Review 2017.
There were 85 vessels reported as total losses around worldwide in 2016, down 16% compared with a year earlier (101). Last year set safety records in the sector with the lowest number of losses in the past 10 years, preliminary figures show. The number of casualties also declined slightly year-on-year, by 4% with 2,611 reported, according to the review, which analyses shipping losses over 100gt.
“While the long-term downward loss trend is encouraging, there can be no room for complacency,” says Baptiste Ossena, Global Product Leader Hull & Marine Liabilities, AGCS. “The shipping sector is being buffeted by a number of interconnected risks at a time of inherent economic challenges.”
More than a quarter of shipping losses in 2016 (23) occurred in the South China, Indochina, Indonesia and Philippines region – the top hotspot for the last decade. Loss activity remained stable but was still almost double the East Mediterranean and Black Sea region (12), which was the next highest. Loss activity was up in the Japan, Korea and North China; East African Coast; South Atlantic and East Coast South America; and Canadian Arctic and Alaska maritime regions.
Cargo vessels (30) accounted for more than a third of all vessels lost. Passenger ferry losses increased slightly (8), driven by activity in the Mediterranean and South East Asia. Standards remain an issue in some parts of Asia with bad weather, poor maintenance, weak enforcement of regulations and overcrowding contributing to loss activity.
The most common cause of global shipping losses remains sinking, accounting for over half of all losses in 2016, with bad weather often a factor. Meanwhile, over a third of shipping casualties during 2016 were caused by machinery damage. This was also responsible for driving a 16% uptick in incidents in the East Mediterranean & Black Sea region (563), enough to see it replace the British Isles as the top incident location over the past decade. Piracy incidents around the globe and shipping incidents in Arctic Circle waters declined year-on-year. However, risk challenges remain, such as the rise in crew kidnappings in parts of Asia and West Africa and the impact of an expected increase in Polar transits.