While the number is down 50% over the past 10 years and 16% compared to 2015, it is still worth noting that 85 large ships ‘disappeared’ last year.
According to
Allianz Global Corporate & Specialty SE’s (
AGCS) fifth annual Safety & Shipping Review, 23, or more than a quarter of shipping losses in 2016, occurred in the region of South China, Indochina, Indonesia, and the Philippines. This region has been considered a hotspot for the last decade.
Describing the area as a ‘new Bermuda Triangle’, Daily Express reported, “some fear that the trouble zone will become a place where ships disappear, often without a trace, after six of the top 10 biggest losses took place near Asian countries.”
Following the Asian hotspot is the East Mediterranean and Black Sea region with 12 losses. Meanwhile, loss activity was up in the Japan, Korea, and North China region with 11.
Allianz reported that cargo vessels (30) accounted for more than a third of all vessels lost while passenger ferry losses increased slightly (8). The analysis showed standards remain an issue in some parts of Asia with bad weather, poor maintenance, weak enforcement of regulations, and overcrowding contributing to loss activity.
The insurer also cited crew negligence and cyber as increasing areas of concern. Allianz added: “New navigational and monitoring technologies could help reduce the impact of human error – which has resulted in $1.6 billion of losses in five years. However, over-reliance brings risks.”
AGCS global product leader hull & marine liabilities Baptiste Ossena said there can be no room for complacency even amid the encouraging long-term downward loss trend. “The shipping sector is being buffeted by a number of interconnected risks at a time of inherent economic challenges,” he noted.
As for cyber risks, Captain Rahul Khanna said the shipping sector does not have a particularly heightened risk awareness. “As no major incident due to a cyber-attack has taken place yet, many in the industry are still complacent about the risks,” commented the head of marine risk consulting at AGCS.
Khanna said if hackers were able to take control of a large container ship on a strategically important route, they could block transits for a long period of time and cause significant economic damage.
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