June 15, 2020

Shipping losses down, but new threats surface

Losses of large vessels dropped by 16% during 2016, to 85 from 101 in 2015, according to the newly released annual Allianz Global Safety and Shipping Review 2017.

The preliminary figures for the accident year show a significant 29% improvement on the 10-year loss average of 119 a year, according to the report.

More than a quarter of losses in 2016 (23) occurred in the South China, Indochina, Indonesia and Philippines maritime region, “which has been the top loss hotspot for a decade,” according to the report.

While losses in this region remain stable year-on-year, the total is still almost double that of the next highest loss region – East Mediterranean and Black Sea (12).

Losses are up year-on-year in the following maritime regions: Japan, Korea and North China; East African Coast; South Atlantic and East Coast South America; and the Canadian Arctic and Alaska.

Cargo vessels (30) account for more than a third of 2016’s losses.

Foundered (sunk/submerged) is the most common cause of all vessel losses, accounting for over half, often driven by bad weather. The number of losses resulting from fire/explosion (8) is up slightly year-on-year.

Machinery damage/engine failure is the main cause of control being lost over the vessel. “While the decline in the number of total losses and casualties is encouraging, there is no room for complacency, especially at a time of inherent economic challenges,” says the report.

“Environmental scrutiny is increasing with record fines being issued for pollution. “New ballast water management rules aimed at stopping the spread of harmful aquatic organisms are welcomed, but will also add a significant cost and potentially bring new risks to shippers.

“Political risk is rising with Yemen and the South China Sea posing increasing threats. “Economic pressure in the shipping industry could accelerate the trend towards larger, more efficient ships.

Such ‘mega ships’ may promise greater efficiencies, but they also bring new risk challenges, such as salvage operations and the availability of suitable ports of refuge in the event of an incident.

“Exposures are increasing exponentially. The loss of a large container vessel or passenger ship in environmentally-sensitive waters could cost billions of dollars, potentially even resulting in a $4bn loss, if two large vessels are involved.

“Concerns over the structural integrity of some larger vessels – particularly conversions – also remains an issue in the wake of a number of incidents and losses resulting from breaches in recent years.

“Industry stakeholders need to come together to address this issue,” says the report.

About the author

Issued by Issued by Siyathetha Communications on behalf of the South African International Maritime Institute.

SAIMI CEO: Odwa Mtati – 082 783 6810 Siyathetha: Ed Richardson: +27 41 582 3750 / 083 656 9757

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