Shipping losses are on a downward trajectory, but given the growing volatility and uncertainties from war and geopolitical events, the consequences of climate change, as well as ongoing risks resulting from the trend for larger vessels, the sector will have its work cut out to maintain this status quo in future.
That’s according to marine insurer Allianz Commercial’s Safety and Shipping Review 2024 which points out that 30 years ago, the global shipping fleet lost around 200 large vessels a year. This total fell to a record low of 26 in 2023, a decline of more than one-third year-on-year and by 70% over the past decade.
“The speed and extent of the way the industry’s risk profile is changing is unprecedented in modern times,” says Captain Rahul Khanna, global head of Marine Risk Consulting, Allianz Commercial.
“Conflicts such as in Gaza and Ukraine are reshaping global shipping, impacting crew and vessel safety, supply chains and infrastructure, and even the environment. Piracy is on the rise, with a worrying re-emergence off the Horn of Africa. The ongoing disruption caused by drought in the Panama Canal shows how the changing climate is affecting shipping, all at a time when it is having to undertake its most significant challenge, decarbonisation.”
Southeast Asia has emerged as the maritime region with the highest total losses, according to the report.
During 2023, 26 total losses were reported globally compared with 41 a year earlier. There have been more than 700 total losses reported over the past decade (729). The South China, Indochina, Indonesia and the Philippines maritime region has been the global loss hotspot, both over the past year and decade (184). It accounted for almost a third of vessels lost last year (8). The East Mediterranean and Black Sea ranks second (6) with activity up year-on-year. Cargo ships accounted for over 60% of vessels lost globally in 2023. Foundered (sunk) was the main cause of all total losses, accounting for 50%. Extreme weather was reported as being a factor in at least eight vessel losses around the world in 2023, with the final total likely higher.
The number of shipping incidents reported globally declined slightly last year (2 951 compared to 3 036), with the British Isles seeing the highest number (695). Fires onboard vessels – a perennial concern – also declined. However, there have still been 55 total losses in the past five years, and over 200 fire incidents reported during 2023 alone (205) – the second-highest total for a decade after 2022, the report reveals.
Decarbonisation is a further concern for an industry juggling new technologies alongside existing ways of working. For example, the industry will need to develop infrastructure to support vessels using alternative fuels, such as bunkering and maintenance, while at the same time phasing out fossil fuels.
