During the past decade, the number of shipping vessels deemed total losses declined 57%, according to Allianz Global Corporate & Specialty (AGCS). Although total losses continued this trend by declining in 2021, which saw 54 total losses compared with 65 in 2020, the number of reported shipping causalities and incidents rose this past year. Accounting for the most total losses, by vessel type, during 2021 were cargo ships, fishing vessels and passenger ships, respectively. "A number of recurring themes have emerged in major incidents in recent years, many of which are a consequence of the increased size of vessels," Justus Heinrich, global product leader marine hull at AGCS. "As vessels have grown larger, values at risk have increased, while the environmental bar has been raised. However, regulation, safety management systems and salvage capabilities appear to have not always kept pace." In particular, fires on large container vessels and roll-on/roll-off (ro-ro) car carriers drove an "oversized portion" of losses in the sector, according to the marine insurer. "Fires on board large vessels remain the top issue for the shipping industry. We continue to see major incidents involving fires on large container ships, and now the emphasis is also shifting to car carriers and ro-ro vessels," Captain Rahul Khanna, global head of marine risk consulting at AGCS, said in the Shipping and Safety Review 2022. During the past five years, there have been more than 70 reported fires on container ships alone, AGCS reported. Offering recent examples were Felicity Ace, a ro-ro carrier, and container ship X-Press Pearl, both of which suffered fires that resulted in total losses. In the case of Felicity Ace, some 4,000 vehicles were lost in the blaze.

(Credit: AGCS)

One of the ways car carriers can catch on fire, according to AGCS, is if a vehicle in a cargo hold has a malfunction or electrical short circuit. Additionally, open decks can allow a fire to spread quickly. Further, the growing number of electric vehicles being transported by sea worsens the situation, as existing counter-measures might not be up to the challenge presented by an EV blaze, according to AGCS. |

Environmental concerns & rising salvage costs

Since car carriers hold expensive cargo, and salvage and pollution mitigation are costly, losses can pile up quickly. Environmental concerns are also driving up salvage and wreck removal costs, according to Khanna, who noted this is one way a manageable incident on a large vessel can end in a total loss. "Previously, a wreck might have been left in-situ if it posed no danger to navigation. Now, authorities want wrecks removed and the marine environment restored, irrespective of cost," Khanna said. The above slideshow highlights the regions that had the most total losses in 2021, according to AGCS. Related: |

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