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The losses of ocean shipping are declining, but the industry is facing new risks

The ocean shipping industry has continued its long-term positive security trend over the past year, but global economic and political forces are creating challenges around the world, according to Security and Delivery Review from insurance company and consultant Allianz Global Corporate & Specialty SE.

Released this week, the report found that delivery losses have declined significantly over the past decade and less than half of what was in the 1990s. “Loss” of a vessel means that the vessel is lost – either sunk or destroyed, or that the cost of repairing it is too expensive – and “incident” means that the vessel will probably be reusable after it has been repaired. In 2021, the world recorded 54 total losses of ships, compared to 65 years earlier, which means a decrease of 57% over 10 years, the report said. At the same time, the world’s fleet of ships has increased – from 80,000 ships 30 years ago to 130,000 today – reflecting increased attention to safety and training, as well as improvements in ship design, technology and regulation, the report said. “The shipping sector has shown tremendous resilience across stormy seas in recent years, as evidenced by the boom we are seeing today in several areas of the industry,” Captain Rahul Khan, head of global maritime risk consulting at AGCS, said in a press release Monday. . “Total losses are at a record low – about 50 to 75 per year for the last four years compared to 200+ annually in the 1990s.” Although total losses have declined, the number of reported shipping incidents has increased last year. The highest number was recorded in the British Isles – 668 out of 3,000, according to the report. Car damage accounted for more than one in three incidents worldwide (1311), followed by collisions (222) and fires (178), with the number of fires rising by almost 10%. The industry is facing other challenges. As one example, geopolitical issues such as the Russian-Ukrainian crisis are exacerbated by supply chain delays and disruptions caused by the Covid-19 pandemic. “The route industry has been hit on various fronts by Russia’s invasion of Ukraine, with the deaths of people and ships in the Black Sea, trade disruptions and growing sanctions,” the report said. “He also faces challenges in day-to-day operations that affect the crew, the cost and availability of bunker fuel, and the potential for increased cyber risk.” According to Allianz researchers, the industry’s attempts to cope with the increased demand for transportation are also creating problems. In some cases, companies change the use of vessels or extend their service life to solve capacity problems, which can create safety problems. “The economic rebound from Covid-19 blockades has led to a boom for shipping with record increases in charter and freight rates. While this is good for shipping companies, higher freight rates and a lack of container capacity are tempting some operators to use bulk carriers or consider converting tankers into container shipping, ”the report said. “The use of non-container vessels to transport containers raises questions about the stability, fire-fighting capacity and safety of cargo. Bulk carriers are not designed to carry containers that could affect their maneuvering characteristics in bad weather, and the crew may not be able to respond properly in the event of an incident. ” Fires are one of the biggest problems. More than 70 fires have been registered on container trucks in the last five years alone, the report says. Such fires often occur in containers, which may be the result of non- or incorrect declaration of dangerous goods such as chemicals and batteries. Allianz estimates that about 5% of the containers shipped may consist of undeclared dangerous goods. This is especially risky on large ships. “Fires on large ships can spread quickly and are difficult to control, which often leads to the crew leaving the ship, which can significantly increase the final cost of the incident,” the statement said. Allianz Global Security and Delivery Review analyzes losses and incidents for vessels weighing more than 100 tons.

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