Maritime risks are growing as the number of completely lost ships drops to record low
Overall shipping casualties or incidents declined around 3% in 2023, Allianz reports.
During 2023, just 26 large shipping vessels were lost, marking a record low, according to Allianz Commercial, which reported the total number of lost ships fell more than 33% year-on-year and dropped 70% during the past decade. Allianz defines a large vessel as a ship with more than 100 gross tons.
Overall shipping casualties or incidents declined around 3% in 2023, with machinery damage or failure accounting for more than half of all global events.
In 2023, cargo ships accounted for the majority of total losses, with 60% of the ships lost during the year coming from this class. Fishing vessels, with four total losses, ranked second, while tug boats, with three total losses, were the third most common vessel class to be ruled a total loss.
Sinkings were the most common cause of lost ships this past year, accounting for half of the total losses. Wrecked/stranded vessels and fires/explosions were the second and third most common reasons ships were chalked up as total losses, Allianz reported.
The decline in losses came as the global shipping industry saw a rise in piracy, droughts slowed traffic in the Panama Canal, and wars in Ukraine and Gaza put shipping vessels and their crews in perilous waters, according to Captain Rahul Khanna, global head of marine risk consulting for Allianz Commercial.
“The ongoing disruption caused by drought in the Panama Canal shows how the changing climate is affecting shipping, all at a time when it is having to undertake its most significant challenge, decarbonization,” Khanna said in a release.
These challenges create the need to develop alternative shipping routes, which can make shipments take longer to arrive and cost more to send, according to Allianz.
For example, businesses that import products and components from China and Southeast Asia are facing delays in shipping as cargo vessels are using an alternative route around the Cape of Good Hope to avoid conflict in the Red Sea. As of April 2024, the Cape of Good Hope has seen shipping volume increase 193%, Allianz reported.
“Supply chains have been disrupted by a series of events in recent years, from extreme weather and climate incidents, container ship fires and groundings, through to the pandemic and conflicts in Ukraine and the Middle East, and now the Baltimore bridge collapse,” Khanna said in Allianz’s Safety and Shipping Review 2024. “These unrelated events have come together in a short space of time to test the resilience of supply chains, many of which have been shown to be vulnerable to disruption.”
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