AN annual shipping review has revealed large shipping losses have declined by 50 per cent in the past decade. This has been attributed to the development of a more robust safety environment by ship owners.
The Allianz Global Corporate & Specialty SE’s (AGCS) fifth annual Safety & Shipping Review for 2017, said 85 large vessels were lost worldwide in 2016, down by 16 per cent when compared with 2015.
It added the number of shipping incidents also declined slightly year-on-year, by 4 per cent with 2611 reported.
“While the long-term downward loss trend is encouraging, there can be no room for complacency. The shipping sector is being buffeted by a number of interconnected risks at a time of inherent economic challenges,” Baptiste Ossena, ACGS’ Global Product Leader Hull & Marine Liabilities, commented.
There were also record fines for vessel pollution. The review added while new ballast water management rules which came into force in 2017 were welcomed, the cost of complying could have a significant impact on already-stressed shippers.
Political risk was also noted with activity in hotspots such as Yemen and the South China Sea having the potential to affect vessel routes.
More than a quarter of shipping losses in 2016 occurred in the South China, Indochina, Indonesia and Philippines region, the hotspot for the last decade. Meanwhile, over a third of shipping casualties during 2016 were caused by machinery damage.
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.
