16-07-2020
Shipping losses decline to record low: Allianz
Insurance AlertssShipping losses decline to record low: Allianz
Shipping losses have declined dramatically over the past 10 years to a record yearly low, even as political tensions and piracy raise concerns, according to a report released Wednesday by Allianz Global Corporate and Specialty.
The 41 total losses of vessels of over 100 gross tons in 2019 marked a 23% decline from 53 in 2018 and about a 70% drop over 10 years, AGCS said. There have been 951 total losses over the past 10 years, the report said.
Still, security and other challenges remain, as “political risk has become a pressing topic for the shipping industry,” the report said.
“Political rivalries are increasingly being played out on the seas, affecting some of the world’s busiest transit routes,” the report said, noting tensions in the Strait of Hormuz between the Persian Gulf and the Gulf of Oman and ongoing strain in the South China Sea, “where China and the U.S. are vying for influence in Asia Pacific.”
The South China, Indochina, Indonesia and Philippines region saw the highest number of losses in 2019 with 12, down from 15 in 2018. The Gulf of Mexico, which saw four losses in 2019, and the West African Coast, with three losses, came in second and third, after not appearing in the top 10 in 2018, the report showed.
Piracy “remains a major risk for shipping,” the report said, even though 2019’s 162 incidents were down from 201 in 2018, according to the International Maritime Bureau. Technology is being used to enhance navigation and increased use of industrial control systems is helping mitigate machinery breakdown, the report said.
Although technology can help in mitigating the risk of onboard fires through the use of fire control systems, cargo ship fires remain a concern, especially as vessels continue to increase in size, the report said. Cargo vessels, at 15, accounted for more than a third of all total losses during 2019.
The COVID-19 pandemic has led to difficulties changing ship crews, potentially leading to a “mentally and physically fatigued crew, which is known to be one of the underlying causes of human error, estimated to be a contributing factor in 75% to 96% of marine incidents,” the report said.
Source: Business Insurance
