The international shipping sector continued its positive long-term safety trend over the past year, but has to master the challenges of Covid, apply the lessons of the Suez Canal incident with Ever Given, and prepare for the challenges of change. climate and cyber issues ahead.
The number of lost large vessels remained at a low level in 2020, while reported incidents decreased year-over-year, according to the Safety & Shipping Review 2021 report by maritime insurer Allianz Global Corporate & Specialty (AGCS).
“The maritime sector has shown great resilience during the coronavirus pandemic, as evidenced by the strong trade volumes and recovery we are seeing in various parts of the industry today,” says Captain Rahul Khanna, Global Director of Consulting. of Maritime Risks in AGCS. “Total claims are at historically low levels for the third year in a row. However, not everything is a bed of roses.
The current crisis of the crews, the increasing number of problems posed by larger vessels, the growing concerns in Supply chain delays and disruptions, as well as meeting environmental targets, pose significant risk management challenges for shipowners and their crews. “
GATS analyzes maritime transport figures
The annual study of the AGCS analyzes the losses and losses (incidents) of ships of more than 100 gross tons reported. During 2020, 49 total ship losses were reported worldwide, similar to a year earlier (48) and the second-lowest total this century.
This represents a 50% decrease in 10 years (98 in 2011). The number of maritime incidents decreased from 2,818 to 2,703 in 2020 (4%). There have been more than 870 marine accidents in the last decade.
The maritime region of southern China, Indochina, Indonesia and the Philippines remains the world’s hot spot for claims, with one in three claims (16) in 2020 and incidents increasing from year to year. Cargo ships (18) account for more than a third of the ships lost in the last year and 40% of the total losses in the last decade. Sinking was the main cause of total losses in the last year, accounting for one in every two vessels. Machinery damage / failure was the leading cause of maritime incidents worldwide, at 40%.
Covid-19 factors affecting maritime transport
Despite the devastating economic impact of Covid-19, the effect on maritime trade has been less than initially feared. Global maritime trade volumes are on track to exceed 2019 levels this year, after slightly declining in 2020. However, the recovery remains volatile.
Covid-19-related delays at ports and shipping capacity management issues have led to rush hour congestion and a shortage of empty containers. In June 2021, it was estimated that there were a record 300 freighters waiting to enter saturated ports. The time that container ships spend waiting for port moorings has more than doubled since 2019.
The crew change situation on ships is a humanitarian crisis that continues to affect the health and well-being of seafarers. In March 2021, an estimated 200,000 seafarers remained on board ships without being able to be repatriated due to Covid-19 restrictions.
Long periods at sea can lead to mental fatigue and poor decision making, which ultimately has an impact on safety. There have already been maritime incidents involving crews that have been on board for longer than they should. Seafarers’ training is suffering, while attracting new talent is problematic given working conditions.
Less claims by Covid-19
Although Covid-19 has resulted in a limited number of direct marine casualties to date, the industry has not been spared significant casualty activity. “Overall, the frequency of marine claims has not decreased.
We are also seeing an increase in the cost of hull and machinery claims due to delays in the manufacture and delivery of spare parts, as well as space constraints. available at shipyards, “says Justus Heinrich, AGCS Global Product Manager for Marine Hulls. The costs associated with salvage and repairs have also increased. In the future,
Bigger ships, bigger exhibits
The blockade of the Suez Canal by the container ship Ever Given in March 2021 is the latest in a growing list of incidents involving large ships or mega-ships. Ships have become larger and larger as shipping companies seek economies of scale and fuel efficiency.
Furthermore, the largest container ships exceed the 20,000 teu mark, and there are ships of more than 24,000 teu on request: the capacity of the container ships alone has increased by 1,500% in 50 years and more than doubled in the last 15 years.
“Larger vessels present unique risks. Response to incidents is more complex and costly. Access channels to existing ports have been dredged deeper and berths and piers have been expanded to accommodate large vessels. but the overall size of the ports has not changed. Consequently, a failure may become a success more often for large container ships, “says Captain Nitin Chopra, AGCS Senior Advisor for Maritime Risk.
The impact of Ever Given
Had the Ever Given not been released, the salvage would have required the lengthy process of unloading some 18,000 containers, requiring specialized cranes. The scrapping of the large Golden Ray carrier, which capsized in American waters in 2019 with more than 4,000 vehicles on board, has taken more than a year and a half and cost several hundred million dollars.
More fires on board
The number of fires on board large ships has increased considerably in recent years. In 2019 alone there was a record 40 cargo-related fires. Across all ship types, the number of fires / explosions that resulted in total losses increased again in 2020, reaching a four-year high of 10.
Fires often start in containers, which may be the result of failure / declaration of dangerous cargo, such as chemicals and batteries. When misdeclared, they can be poorly packaged and stowed on board, which can lead to ignition and / or complicate fire detection and fighting.
Container losses at sea also skyrocketed last year (over 3,000) and has continued at a high level in 2021, disrupting supply chains and posing a potential risk of contamination and shipping. The number of losses is the worst in seven years.
Larger vessels, more extreme weather conditions, increased freight rates and misreported cargo weights (leading to collapse of container stacks), as well as increased demand for consumer goods, they may be contributing to this increase. It is increasingly questioned how containers are secured on board ships.
Delays and problems in the supply chain
The resilience of the maritime supply chain is in the spotlight following a series of recent events. The Ever Given incident shocked global supply chains that depend on shipping. It exacerbated delays and disruptions already caused by trade conflicts, extreme weather conditions, the pandemic, and increased demand for containerized goods and commodities.
“These events expose the weak links in supply chains and have magnified them,” said Captain Andrew Kinsey, AGCS Senior Maritime Risk Consultant. “Developing more robust and diversified supply chains will become increasingly important, as will understanding the pinch points and nodes in the supply chain.”
Piracy and cyber problems in shipping
The peak of piracy in the world, the Gulf of Guinea, accounted for more than 95% of the number of crews kidnapped worldwide in 2020. Last year, 130 crew members were kidnapped in 22 incidents in the region, the most high in history, and the problem has continued.
Ships are being attacked further offshore, more than 200 nautical miles (nm) in some cases. The Covid-19 pandemic could exacerbate piracy as it is linked to underlying social, political and economic problems, which could deteriorate further. Former outbreaks like Somalia could make a comeback.
The report also notes that the four largest shipping companies in the world have already suffered cyberattacks, and that as geopolitical conflicts increasingly unfold in cyberspace, concern about a possible attack on critical maritime infrastructures, such as a port or port, is growing. a major sea route. Increased awareness and regulation of cyber risk is leading to an increase in cyber insurance by shipping companies, although to date it is mainly dealing with land-based operations.
The environmental landscape
With international efforts to tackle climate change gathering momentum, the maritime sector is likely to come under increasing pressure to accelerate its efforts. “Huge investment in research and development is needed for the sector to meet the demanding targets that have been set.
Today’s fleet and technology will not allow the maritime industry to meet the International Maritime Organization’s goal of reducing emissions by 50%. by 2050, let alone the more ambitious goals that national governments are debating, “says Khanna.
Last year the limit for sulfur content in ship fuel was lowered. Known as IMO 2020, the cut is expected to reduce shipping-damaging sulfur oxide (SOx) emissions by 77%. Insurers have seen a number of machinery damage claims related to scrubbers, which remove SOx from the exhaust gases of ships that use heavy marine fuel.
Most frequent places of losses and incidents
According to the report, the maritime region of South China, Indochina, Indonesia and the Philippines is also the main place of losses in the last decade (224 ships), due to high levels of local and international trade, port congestion and busy shipping lanes, age of fleets and exposure to extreme weather conditions.
Together, the maritime regions of South China, Indochina, Indonesia and the Philippines, the Eastern Mediterranean and the Black Sea, and Japan, Korea and North China account for half of the 876 marine casualties in the past 10 years (437).
The British Isles, North Sea, English Channel and Bay of Biscay region saw the highest number of reported claims (579) in 2020, although this figure decreased from year to year. And finally, the ships most prone to accidents last year were a ferry from the Greek islands and a RoRo ferry in Canadian waters, both implicated in six different incidents.