Shipping losses continued the long-term downward trend with 75 losses suffered worldwide in 2014, making it the safest year in the industry in a decade. This is what the third edition of Safety and Shipping Review 2015 by Allianz Global Corporate & Specialty SE (AGCS), which looks at reported shipping losses in excess of 100 tonnes.
Losses were down 32% year-over-year, well below the 127-year average of 50. Losses in transportation have decreased 2005% since 2014. More than a third of total losses in 17 occurred in two maritime geographical areas: Southern China, Indochina, Indonesia and the Philippines (12 vessels) and Japan, Korea and Northern China (50 vessels). Freighters and fishing vessels accounted for more than XNUMX% of all losses.
The most common cause was shipwreck (sinking/submersion) which accounted for 65% of losses in 2014 (49). With 13 ships stranded or destroyed, grounding was the second leading cause, followed by fires/explosions (4) in third place, but with a significant decline year-over-year.
According to the report, there were 2.773 shipping incidents worldwide (including total losses) during 2014. The Eastern Mediterranean and Black Sea area were the hot spots (490), up 5% year on year. The British Isles, the North Sea, the English Channel, the Bay of Biscay are in second place (465), up 29%, and it has also been the hotspot for accidents over the past decade. December is the worst month for losses in the Northern Hemisphere, while August is the worst month for the Southern Hemisphere. For every total loss in the Southern Hemisphere, there are about 7 in the Northern Hemisphere.
A vessel in the North American Great Lakes region has the title of most unfortunate. Reports indicate that she has been involved in 19 accidents in the past 8 years - a record 6 in one year. She has suffered a fire, engine failures, drive system failures and even hit a submerged log.
Spotlight on passenger safety and crew levels
While the declining trend in shipping losses is encouraging, recent incidents such as those of Sewol e Norman Atlantic have again raised concerns about the training and emergency preparedness of ship passengers. Seven passenger ships were lost in 2014, accounting for almost 10% of total losses. “In many cases the ship's structure is not the only weak point. These two incidents highlight a worrying gap in crew preparedness for emergency operations on ro-ro ferries or passenger vessels,” says Sven Gerhard, Global Product Leader Hull & Marine Liabilities, AGCS.
The trend of ever-fewer crew members means that seafarers are being asked to do more with fewer resources. The minimum crew levels on board reduce the possibility of training the personnel on board, which could instead provide a very important contribution. To have safe operations, training must not become a routine.
Bigger ships
Even the safety of container ships is under control due to their ever increasing size, as evidenced by the inauguration in January 2015 of the largest container ship, the MSC Oscar (19.224 teu). As long as four football fields, it can accommodate 19.000 containers. However, they are expected to enter service from 22.000 teu. “Larger ships can also mean greater losses. The industry must prepare for future losses of more than $1 billion from container ships or even floating offshore installations,” Gerhard said. Maximum exposure is not necessarily limited to ships and cargo, but can also create an environmental or corporate backlash. This increases the doubts as to whether the risk management needs to be reviewed, considering the 80% increase in capacity in a decade.
AGCS identifies particular dangers for this type of mega-ship, including the fact that operations are limited to a small number of deepwater ports, meaning a higher concentration of risks. There is also a worldwide shortage of skilled crew, and salvage and removal are also challenging. “The shipping industry needs to think long and hard before making the move to larger vessels,” adds Captain Rahul Khanna, Global Head of Marine Risk Consulting, AGCS.
Ports and ships become targets of hackers
Inadequate protection against cyber risks is another threat to the increasingly interconnected and automation-dependent shipping industry. “Cyber risk is in its infancy in this sector today, but ports and ships could soon become attractive targets for hackers. Companies need to simulate these potential scenarios and identify the right risk mitigation strategies,” Khanna said. "A cyberattack targeting onboard technology, especially electronic navigation systems, can lead to total loss or involve many ships of the same company," said Gerhard. Other scenarios may see cybercriminals targeting important ports, closing terminals or interfering with containers or confidential data. Attacks of this kind can also give rise to significant costs of interruption, as well as losses of reliability or reputation.
The "Polar Code" is well accepted, but needs constant revision
The shipping industry has welcomed the recent arrival of the “Polar Code” which aims to contain the risks due to the growing traffic in the Arctic and Antarctic. Analyzes show that in 2014 there were 55 accidents in Arctic Circle waters, including one total loss. In 2005 there were only 3. While the code addresses many safety issues, some issues remain especially regarding crew training, vessel suitability and potential remediation. The "Polar Code” needs constant revision. Any maritime problems encountered and best practices to be employed should be reviewed at the end of each season.
Additional risks to face
Other risks identified by Safety and Shipping Review 2015 They include:
· Overreliance on electronic navigation: The collision of the cargo ship Rickmers Dubai with a floating crane in 2014 is an example of the dangers of overreliance on electronic navigation. Training standards around systems such as Electronic Chart Display and Information (ECIDS) are mixed. “Officers need solid training to avoid misinterpretation of ECIDS and operational errors that could lead to costly disasters. However, navigational skills and assistance are essential,” says Khanna.
· Increase in geopolitical instabilities: The recent increase in geopolitical tensions around the world is worrying. The growing number of refugees moving by sea creates search and rescue problems. In 2014, more than 207.000 migrants crossed the Mediterranean, brought about by the civil war in Syria. The International Maritime Organization estimates that in 2014 at least 600 merchant vessels were diverted to rescue people, placing strain on salvage resources and infrastructure. Conflicts in the Middle East increase pressure on the supply chain. Ships must not underestimate the safety risks.
· Piracy risks moving from Africa to Asia: While there has been progress in combating these activities in Somalia and the Gulf of Guinea – resulting in a decrease in overall attacks (245) for the fourth consecutive year – piracy is also very active elsewhere. Attacks in Southeast Asian waters are increasing year-on-year, as are incidents in the Indian sub-continent, with Bangladesh being a new hot spot.
