Safety & Shipping Review 2016 – Key Facts

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Allianz Global Corporate & Specialty (AGCS) has issued annual ”Safety and Shipping Review”, a report which focuses on key developments in maritime safety and analyzes shipping losses (of over 100 gross tons) during the 12 months prior to December 31, 2015.

We know that you are too busy to read the complete report which is why we spent some time and extracted key facts and figures for your easy reference . We are sure that these facts will blow your mind and no doubt you will be amazed at the findings.

International shipping transports approximately 80% of global trade by volume and over 70% of global trade by value.  The safety of vessels is critical to the global economy.  The maritime industry saw the number of total losses remain stable during 2015, declining slightly to 85; the lowest total for a decade and the second year in a row annual losses fell below 100.

Key Findings:

  1. 85 large ships lost worldwide in 2015, down by 45% over a decade.
  2. Cyber exposure, “mega ship” salvage issues and extreme weather heighten risk environment.
  3. Ship losses and piracy attacks up in top global hotspot –South East Asian waters.
  4. Economic and market conditions are pressurizing costs, raising safety concerns.

Did you know?

Saturday is the safest day and Thursday is the most frequent day for shipping incidents.

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Did you know?

Shipping losses declined by 3% compared with 2014.  They have declined by 45% over the past decade.

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Total losses declined 3% year-on-year from 88 to 85 – the lowest for a decade.  More than a quarter of all losses occurred in the South China, Indochina, Indonesia and Philippines region (22, up three losses year-on-year).  Total losses in the East Mediterranean and Black Sea and Japan, Korea and North China regions declined year-on-year.

Total Losses by Top 10 regions:

From January 1, 2015 to December 31, 2015:

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Total Losses by Top 10 regions: 

From January 1, 2006 to December 31, 2015:

2006 – 2015: 1,231 losses worldwide were identified over this period.  The 2015 accident year (85) represents a significant improvement on the 10-year loss average (123). South China, Indochina, Indonesia and Philippines has been the top hotspot (252) for a decade, followed by East Mediterranean and Black Sea (162) and Japan, Korea and North China (145).

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10 largest vessels lost from January 1, 2015 to December 31, 2015 (showing approximate location of loss and type of vessel)

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“More extreme weather conditions have been predicted. Weather routing will continue to be a critical component to the safe navigation of vessels”

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Thank God!

Tankers continue to be the safest ships with minimal accidents/casualties.

Total losses by type of vessel 2006-2015:

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Total Losses by type of vessel:

January 1, 2015 – December 31, 2015

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Causes of Total Losses 2006-2015:

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January 1, 2015 – December 31, 2015:

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Key Points:

  1. Machinery damage (36%) is already the most common cause of shipping incidents and preventative measures is often one of the first shipboard expenses to suffer.
  2. There has been an increase in fatigue-related insurance claims over the past decade.  With crew members often at their lowest possible level, and with the industry anticipating a future staffing shortage, expectations are for longer shift patterns, which could exacerbate the issue.  Meanwhile, training remains below par in some areas, such as with electronic navigational aids, which should not be seen as a panacea but as a tool.
  3. The appetite for ever-larger container ships has seen cargo-carrying capacity of the largest vessels increase by over 70% over the past decade, to carry 19,000+ containers today. Two “mega ships” were grounded in February 2016, raising safety concerns about what could happen should a more serious incident occur.
  4. Meteorological predictions anticipate more extreme weather conditions, bringing additional safety risks for shipping and potential disruption to supply chains.  Hurricanes and bad weather were contributing factors in at least three of the five largest vessels lost during 2015 including El Faro, the worst US commercial maritime disaster in decades.
  5. The shipping industry has been proactively working to reduce emissions, but there have been unexpected safety implications connected with the use of ultra-low sulfur fuel. Engine problems and power issues have been reported and such incidents could increase as regulations on sulfur content in fuel tighten further.
  6. The maritime industry’s reliance on interconnected systems poses risks as well as bringing benefits.  Threats can result from improper integration and interaction of cyber systems/updates or attacks from external sources and are not always detected.  More needs to be done to educate companies.

Other rising concerns include:

  • Supply chain and accumulation risk in the wake of the Tianjin explosion in China in 2015;
  • Cargo risk, particularly around accurate weighing of containers and shifting cargo (liquefaction) – technological support is needed to test the moisture content of cargoes which can liquefy;
  • Car carrier stability – in the aftermath of the Höegh Osaka grounding incident;Geopolitical instability – in addition to the physical risks, there are operational risks due to unexpected port closures and vessel delays;
  • The return of Iran to the global shipping stage after easing of sanctions raises safety questions about vessel and port standards in Iranian waters.

Further details may be found by reading Allianz’s Safety and Shipping Review 2016

Source: Allianz

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