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By Sam Whelan
Major ship losses continued to decline last year, but smaller incidents are on the rise, alongside increased safety risks resulting from the coronavirus pandemic.
Today’s Safety & Shipping Review 2020, published by insurance provider Allianz, reveals 41 ships of over 100 gross tons were lost in 2019, 20% fewer than in 2018 and 70% fewer than a decade ago.
Asia was worst hit, with 14 large ship losses, which Allianz puts down to high levels of trade, busy shipping lanes, older fleets and typhoon exposure.
There were 15 cargo ships lost last year, most in South-east Asia, and the report highlights ro-ro vessels as among the biggest safety risks, with total losses and smaller incidents up 20%.
Rahul Khanna, global head of marine risk consulting at Allianz said: “The rise in number, and severity, of claims on ro-ro vessels is concerning. Ro-ros can be more exposed to fire and stability issues than other vessels. Many have quick turnarounds in port, and a number of accident investigations have revealed that pre-sail stability checks were either not carried out as required, or were based on inaccurate cargo information.”
Across all sectors, the number of small incidents, such as those caused by machinery damage, were up 5% to 2,815.
“We cannot lose sight of the fact that, while total losses have reduced significantly, the total number of incidents increased year on year,” noted Baptiste Ossena, the Allianz global product leader for hull insurance.
“It does not take much for a serious incident to result in a total loss and, hence, the warning signs are there.”
For example, Allianz said, there were almost 200 reported fires on vessels over the past year, a 13% increase, with five total losses in 2019 alone, with misdeclared cargo the major cause.
Indeed, a spate of containership fires prompted renewed focus on verified gross mass (VGM) declarations recently, with carriers implementing new and higher surcharges for misdeclared cargo weights.
And the report highlights the potential safety risks from the crew change crisis, as well as a raft of other challenges following the global coronavirus pandemic, lockdowns and, ultimately, recession.
“The inability to change crews is impacting the welfare of sailors, which could lead to an increase in human error onboard vessels,” Allianz said.
Furthermore, cargo damage and delay are more likely to occur as supply chains come under strain, the report claims, adding that disruption of essential maintenance and servicing heightens the risk of machinery damage – one of the major causes of insurance claims.
Mr Khanna added: “We know from past downturns that crew and maintenance budgets are among the first areas that can be cut, and this can impact the safe operations of vessels and machinery, potentially causing damage or breakdown, which in turn can lead to groundings or collisions.
“It is crucial that safety and maintenance standards are not impacted by any downturn.”
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