Ocean marine total losses hit 12-year low in 2022
Fewer than 40 vessels were total losses in 2022, a 36% drop from the year prior, AGCS reports.
In 2022, ocean marine losses hit their lowest point in the 12 years low, Allianz Global Corporate & Specialty (AGCS) has been producing its annual Safety & Shipping Review. During the past year, 38 vessels were total losses compared with 59 in 2021.
Additionally, the number of vessels lost declined 65% during the past decade. AGCS reported regulation, improved ship design, and technology and risk management advances are the major forces propelling losses downward.
While total losses declined year-on-year, the number of shipping causalities and incidents reported was relatively flat year on year, with AGCS reporting 3,032 incidents in 2022 compared with 3,000 in 2021.
“While these results are gratifying, several clouds appear on the horizon,” Captain Rahul Khanna, global head of marine risk consulting at AGCS, said in a release.
Fire risk continues to rise
Machinery breakdowns continued to be the leading cause of losses, accounting for nearly half of all incidents worldwide. However, hull and cargo fires are becoming a growth threat, according to AGCS.
During 2022, there were more than 200 shipping-vessel fires reported, an increase of 17% compared with the year prior, AGCS reported.
Among the factors driving up shipping fire risks is the increasing use of lithium-ion batteries, which are potentially highly flammable, according to AGCS. The lithium-ion battery market is expected to grow 30% annually during the coming decade, spurred on by the transition to electric vehicles.
One of the biggest issues with these types of batteries is the potential for thermal runaway, which AGCS describes as a rapid self-heating fire that can cause explosions. Lithium-ion batteries burn at intense temperatures and do not need oxygen as the blazes are chemical in nature. Since they self-oxidize, lithium-ion batteries can reignite days or even weeks after the first ignition, AGCS reported.
“Most ships lack the suitable protection, detection and firefighting capabilities to tackle such fires at sea,” Khanna said. “Attention must focus both on pre-emptive measures and emergency plans to help mitigate this peril such as adequate crew training and access to appropriate firefighting equipment or improving early detection systems.”
Khanna suggested that ships purpose-built to hull EVs might be the solution to these challenges.
Mis-declared cargo continues to be an issue, according to AGCS. Around a quarter of serious incidents onboard container ships are caused by mis-declared goods such as chemicals, charcoal and batteries.
“Failure to properly declare, document and pack hazardous cargo can contribute to blazes or hamper firefighting efforts,” Khanna explains. “Labeling a cargo as dangerous is more expensive. Therefore, some companies try to circumvent this by labeling fireworks as toys or Li-ion batteries as computer parts, for example.”
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