Shipping sector still facing series of challenges, including rising costs of goods and labor.
Report
Safety & Shipping Review 2023
About this report from Allianz Global Corporate & Specialty:
A combination of factors impacting fire risk, ongoing and new threats posed by the ripple effects of the Ukraine conflict, decarbonization challenges, economic uncertainty, as well as the rising cost of marine claims, means the shipping sector still has plenty of obstacles to navigate over the next 12 months and beyond, according to insurer Allianz Global Corporate & Specialty’s Safety & Shipping Review 2023.
“Shipping losses have sunk to the lowest number we have seen in the 12-year history of our annual study reflecting the positive impact safety programs, trainings, changes in ship design and regulation have had over time,” Rahul Khanna, global head of marine risk consulting at AGCS, said in a news release to announce the report’s release. “While these results are gratifying, several clouds appear on the horizon. More than a year after Russia’s invasion of Ukraine, the growth of the shadow oil tanker fleet is the latest consequence to challenge shipowners, their crew and insurers. Fire safety and the problem of mis-declaration of hazardous cargo must be fixed if the industry is to benefit from the efficiency of ever- larger vessels. Inflation is pushing up the cost of hull, machinery and cargo claims. Meanwhile, although the industry’s decarbonization efforts are progressing, this remains by far the sector’s biggest challenge. Economic pressures could put vital investments in companies’ strategies, as well as in other safety initiatives, in jeopardy.”
Every year AGCS analyzes reported shipping losses and casualties (incidents) involving ships over 100 gross tons. During 2022, 38 total losses of vessels were reported globally, compared with 59 a year earlier. This represents a 65% decline in annual losses over 10 years (109 in 2013). Thirty years ago, the global fleet was losing 200+ vessels a year.
Other notable findings include:
- Hull and cargo fire risks continue to be a concern
- Ripple effects continue from Russia’s invasion of Ukraine
- Economic pressures are back on the radar after stabilizing in 2022
- High commodity prices, rising labor costs and supply chain disruptions continue to take their toll
