SAFETY AND SHIPPING REVIEW 2018 - An annual review of trends and developments in shipping losses and safety - Allianz Global Corporate & Specialty
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ALLIANZ GLOBAL CORPORATE & SPECIALTY SAFETY AND SHIPPING REVIEW 2018 An annual review of trends and developments in shipping losses and safety
Allianz Global Corporate & Specialty Safety and Shipping Review 2018
04
CONTENTS
Executive summary
08 Losses in focus
CASUALTIES
18 Behavioral and cultural risk still needs addressing
20 Industry’s struggle with container ship fires continues
22 Safety responses round-up
CLIMATE
24 Record-breaking hurricane season brings supply chain pressure
26 Superstorms pose future challenges for yacht market
28 Fast-changing Arctic and North Atlantic conditions bring route risks
30 Exploitation of the seas
31 Compliance with new emissions rules likely to be problematic
TECHNOLOGY
34 Shippers get serious about cyber threat
36 Use of drones in the shipping sector set to take-off
38 Sensors could improve navigation, supply chain and cargo risk management
40 Autonomous shipping progresses but risk management and regulatory challenges remain
SECURITY
42 Rising political risk brings safety fears
44 Piracy numbers hit record low but threat remains
46 Data and sources
47 Contacts
Photo: iStock
Shipping incidents in Arctic Circle waters are on the rise.
Cover images: Indian Coast Guard, iStock, US Navy
2 3
Allianz Global Corporate & Specialty Safety and Shipping Review 2018
and Black Sea region is the second major
loss hotspot (17), followed by the British
SAFETY & SHIPPING REVIEW 2018 IN NUMBERS Isles (8) and the Arabian Gulf (6).
Cargo ships (53) account for over half of all
1,129 total losses vessels lost during 2017, with activity up
over past 10 years 30 losses in South China, Container ships are annually by 56%, driven by a rise in
Indochina, Indonesia and getting bigger. Capacity foundering (sinking) incidents. Fishing and
90% of global
trade transported
94 total losses in
2017. Second lowest Bad weather a
Philippines - the main hotspot has increased by almost passenger vessel losses are down year-on-
year. Losses involving bulk carriers and
94
1,500% in 50 years
by shipping total in a decade. factor in 21 losses tankers increased, with bulk carriers
Major risks accounting for five of the 10 largest
Major risks reported total losses by gross tonnage (GT).
losses in 2017
Foundering has been the cause of over half
of the 1,129 total losses reported over the
past decade. It accounted for an even
Busy seas Typhoons higher share of 2017 losses (65%), with bad
Fire-fighting Cargo weather often a factor. Wrecking/stranding
capability misdeclaration ranks second (13), followed by machinery
damage/failure (8). Fire/explosion losses
declined year-on-year (6).
Piracy Safety There were 2,712 reported shipping
180 piracy standards incidents (casualties) in 2017, up slightly
attacks in 20171 . Salvage Ports of year-on-year by 3%, driven by a rise in
Down year-on- challenges refuge machinery damage incidents – the top cause
year. Lowest of casualties around the globe (42%). The
total for 22 years 3 regions account for East Mediterranean and Black Sea region
↓
almost half of all losses is the most frequent location for incidents.
Political risk 75% of shipping insurance
losses are caused by human Behavioral and cultural risk needs
error. Equivalent to $1.6bn addressing. Technology can help. Despite
huge improvements in maritime safety,
53 losses - cargo ship ↑ 61 losses caused by ↑ 6 vessels lost
↓ fatal accidents at sea persist. Human error Allianz Global Corporate & Specialty
most frequent vessel Up year- Up year-
Down Source: Allianz Global Corporate & Specialty continues to be a major driver of incidents
Safety and
foundering in 2017. to fire in 2017. year-on-
Shipping
lost globally in 2017 on-year on-year
year Additional references: 1 International Maritime and captains and crews are under
Review 2017
An annual review of trends and developments
in shipping losses and safety
Bureau; Lloyd’s List Intelligence Casualty Statistics increasing commercial pressure as supply
chains are streamlined. Tight schedules can
have a detrimental effect on safety culture
and decision-making leading to the
“normalization of risk”. Better use of data
EXECUTIVE
and analytics can help to address this. The
Shipping is the lifeblood of the global economy, Disparities remain. The South China, shipping industry has learned from losses in
transporting approximately 90% of global trade. There Indochina, Indonesia and Philippines the past but predictive analysis is important
This sixth annual review
are over 50,000 merchant ships trading internationally,1 maritime region has been the number one for the future. New insights from crew focuses on key developments
carrying every kind of cargo, so the safety of vessels is area worldwide for major shipping behavior and near-misses can help identify
SUMMARY
in maritime safety and
critical. The maritime industry saw the number of total incidents for the past decade, leading human error trends. Sensor technology can analyzes shipping losses
shipping losses remain stable during 2017, declining slightly some media commentators to call it the also enhance risk management. For (of over 100 gross tons)
during the 12 months prior to
to 94 – the second lowest total over the past decade. “new Bermuda Triangle”. Last year, example, hull stress monitoring sensors December 31, 2017. It follows
almost a third (32%) of losses occurred here could be linked to ship navigation in bad the Safety & Shipping
Losses were down 4% compared with a year earlier (98) – (30) – up 25% annually. Not only are the weather, feeding real-time information on Review 2017 available at
current figures show a significant improvement on the seas busy, they are also prone to bad structural integrity. However, over-reliance www.agcs.allianz.com/
insights
10-year loss average (113) – down 17%. Over the past weather – in 2017 Typhoon Damrey on technology on board must be avoided.
decade, total losses have declined by more than a third contributed to a number of losses (6). In Continual training is imperative to ensure
(38%), driven by improved ship design, technology and addition, safety processes on some the right balance is achieved between
advances in risk management and safety. Recent lower domestic routes continue to lag behind technology and human intervention.
shipping activity is also a factor. global standards. The East Mediterranean
1 I nternational Chamber of Shipping
4 5
Allianz Global Corporate & Specialty Safety and Shipping Review 2018
Industry’s struggle with container will need to be disseminated faster
ship fires continues: Major fires on than at present in future. Ice also
container vessels are one of the most poses a significant hazard elsewhere.
significant safety issues. The blaze on Over 1,000 icebergs drifted into North
the ultra-large container ship (ULCS) Atlantic shipping lanes in 2017 – the
Maersk Honam in March 2018 is one fourth consecutive “extreme” season 4 .
21 of a number of incidents in recent
years. Issues driving container ship fire
Sailing in such conditions necessitates
specialist training for seafarers and
exposures include the adequacy of fire- additional routing support.
fighting capabilities as vessels become
larger, misdeclaration of cargo, Exploitation of the seas increases: Photo: iStock Photo: US Navy Photo: US Navy
losses from bad salvage challenges and time taken to The marine environment is seen as a Container-carrying capacity has increased by almost The USS Fitzgerald collided with Human error was a factor in the El Faro loss in late 2015,
weather in 2017 access a port of refuge. ULCS provide resource, bringing environmental risks 1,500% in 50 years, bringing new risks. a container ship in June 2017. which has led to new safety legislation being proposed.
economies of scale but the industry for shipping, such as pollution of fish
needs to ensure risk management farms or even pirate fishing, which is masks the true picture in shipping human error entirely. It will still be
standards are up to speed, as larger estimated to cost the global economy when it comes to cyber risk. New present in the algorithms that drive
container ships are on their way. as much as $23.5bn a year5 . regulations such as the European the decision-making of vessels, while
Increasing maritime activity also Union’s Network and Information manned onshore bases will continue
Record-breaking hurricane season brings potential new collision hazards, Security Directive will change that to control and monitor. Automation
brings supply chain and yacht such as the growing number of and also exacerbate the fall-out from raises questions about who is at fault
problems: Hurricanes Harvey, Irma and offshore wind farms in the North Sea any cyber failure. Many shipping in an accident – the manufacturer,
Maria (HIM) and other severe weather – offshore wind In Europe grew 25% in companies are looking to improve software provider or the onshore
events in 2017, such as Typhoons 2017; a record year6 . cyber security on board, by separating bases. New kinds of losses, such as
Damrey and Hato, show traditional IT systems for different functions, such cyber or product liability, could
maritime risks should not be overlooked. New emissions rules problematic: as navigation, propulsion and loading. replace traditional claims. Technical
AGCS analysis shows bad weather Increasing environmental and management and maintenance of
directly contributed to at least 21 total sustainability pressures – such as the Drones ready for take-off: ships will also need to be rethought.
losses in 2017 and this could yet new “Paris Agreement for the Unmanned aircraft systems are One of the main challenges for the
increase further (see page 9). Fuel shipping industry”, which aims to finding a growing number of insurance industry in future will be
market, cargo, cruise ship and port significantly cut all emissions – and applications in the maritime sector. dealing with more technical shipping
operations were also disrupted, existing industry commitments to They are increasingly used by class claims, resulting from greater use of
leading to natural catastrophes being reduce sulphur oxide emissions – will societies and marine surveyors to new technology.
ranked the top risk by shipping experts enhance innovation in ship design and assess vessel damage and more uses
in the Allianz Risk Barometer 2018. practices but will also bring changes are likely in future, which could have Political risk and piracy still rule the
Shippers need to consider scenarios in risk profile and financial challenges. the potential to make a significant waves: Heightened political tensions
where multiple locations are impacted The shipping industry is increasingly contribution to safety and risk around major shipping routes, such as
when drawing up contingency plans. looking to technical solutions to management. These include assessing off the coast of Yemen in the Middle
Meanwhile, the estimated 60,000 reduce emissions, which could bring environmental pollution, monitoring East and the South China Sea in Asia,
M TWT F S S pleasure craft 2 damaged or destroyed accompanying risk issues with engines cargo loading and pirate activity pose a risk of disruption. Although
by HIM in the US and Caribbean raises and bunkering of biofuels, as well as along coastlines and carrying out piracy incidents have dropped to a
questions over the insurability of such
vessels remaining in the region during
questions over appropriate training of
crew. The reduction in sulphur
cargo tank inspections. Drones could
enable faster, more informed decision-
22-year low (180 attacks) 7, hotspots
remain. Three quarters of incidents
$1.6bn
Friday is the most frequent
day for shipping losses over the season. emissions by 2020 comes with cost making on board, reducing the impact occur in South East Asia and Africa.
the past decade (175) with implications and doubts over sufficient of any incident. Indonesia (43 attacks) remains the
Saturday (143) the safest day Fast-changing ice conditions bring availability of affordable low-sulphur main location although activity has
at sea. Friday 13th can be route risks: Climate change is fuel. Exhaust gas-cleaning systems or Autonomous shipping progresses declined. Conversely, activity in the Cost of losses
unlucky with five ships lost,
impacting ice hazards for shipping, “scrubbers” are costly, with demand but challenges remain: Significant Philippines more than doubled year- resulting from
including three on January 13, human error,
2012 – one of which was freeing up new trade routes. For outstripping supply. Compliance is milestones continue to be reached but on-year (22 attacks). In Africa, there
Costa Concordia. example, cargo volumes on the likely to be problematic and industry legal, safety and security issues are was an increase in Somalian pirate based on analysis
Northern Sea Route increased by preparation lacking. likely to limit growth of crewless activity. In South America, Venezuela of 15,000 marine
nearly 40% to 9.7 million tons over the vessels for the foreseeable future. saw a significant increase in piracy insurance claims8
J F M A M J
J A S O N D past year – the biggest annual volume Shippers get serious on cyber: Major Autonomous shipping could improve activity, with one happening every
ever3 . China has also announced attacks, such as NotPetya, which maritime safety but will not remove month on average during 2017.
plans for an “Arctic Silk Road”, caused around $3bn of economic
November is the busiest
month for losses (36) in the top developing shipping lanes opened up losses, have created a renewed
2 oat Owners Association of The United States
B
hotspot over the past decade by global warming. There were 71 urgency in tackling the threats posed 3 ussian Federal Agency For Maritime and River Transport
R
– South China, Indochina, reported shipping incidents in Arctic to vessels and the supply chain, as 4 Captain, Ice Patrol More Than 1,000 Icebergs Drifted Into N. Atlantic Shipping Lanes in 2017, December 2017
G
Indonesia and Philippines – a Circle waters during 2017, up 29% well as increasing interest in cyber 5 gnew DJ, Pearce J, Pramod G, Peatman T, Watson R, Beddington JR, et al. (2009) Estimating the Worldwide
A
third were directly caused by Extent of Illegal Fishing. PLoS ONE 4(2): e4570.
typhoons (12). year-on-year. Arctic conditions can business interruption insurance. The 6 W ind Europe, Offshore wind in Europe grew 25% in 2017, February, 2018
change quickly and transit information current lack of incident reporting 7 I nternational Maritime Bureau
8 A llianz Global Corporate & Specialty, Global Claims Review: Liability In Focus, 2017
6 7
Allianz Global Corporate & Specialty Safety and Shipping Review 2018
LOSSES IN FOCUS The analysis over the following pages
covers both total losses and casualties/
incidents. See page 46 for further details
2017 REVIEW
2017: The database shows 94 total TOTAL LOSSES BY TOP 10 REGIONS
losses reported during 2017. This FROM JANUARY 1, 2017 TO DECEMBER 31, 2017
compares with 98 during 2016 – a
TOTAL LOSSES BY TOP 10 REGIONS decline of 4%. South China, Indochina, Region Loss Total Year-on-year change
2008-2017 AND 2017 Indonesia and Philippines is once S. China, Indochina, Indonesia and Philippines 30 ↑6
again the top region for total losses. East Mediterranean and Black Sea 17 ↓2
94 total losses in 2017
Almost a third (32%) of losses occurred British Isles, N. Sea, Eng. Channel and Bay of Biscay 8 =
Russian Arctic and
in this region (30 total losses). Over Arabian Gulf and approaches 6 ↑3
Bering Sea
three quarters of these incidents Japan, Korea and North China 6 ↓5
89 29
involved cargo vessels. Foundered
S. Atlantic and East Coast S. America 5 ↑1
126
(sunk/submerged) was the top cause,
West Mediterranean 4 =
8 accounting for 80% of losses in this
West African Coast 3 =
British Isles, N. Sea, 2 169 region. Typhoon Damrey was a
Eng. Channel and
Bay of Biscay
Baltic
Baltic 6 contributing factor to at least 6 losses. Baltic 2 ↑2
252
48 Bay of Bengal 2 ↓1
17 Japan, Korea and
4 62 North China Other 11 ↓4
West Mediterranean Total 94 ↓4
6 30
East Mediterranean
and Black Sea
28 Source: Lloyd’s List Intelligence Casualty Statistics
Arabian Gulf Data Analysis & Graphic: Allianz Global Corporate & Specialty
241 51 and approaches 2 S. China, Indochina,
34 Indonesia and Philippines
3 Bay of
Bengal
11
West African Coast
East African Coast
2008 - 2017 REVIEW
All figures are based on reported total TOTAL LOSSES BY TOP 10 REGIONS
All other regions
5 losses as of February 5, 2018. 2017 FROM JANUARY 1, 2008 TO DECEMBER 31, 2017
S. Atlantic and
total losses may increase slightly as,
East Coast S. America Total Losses by region: from Jan 1 2008 - Dec 31 2017
based on previous years’ experience, Region Total Loss
1,129 total losses between Total Losses by region: from Jan 1 2017 - Dec 31 2017
developments in losses lead to a S. China, Indochina, Indonesia and Philippines 252
2008 and 2017
number of total losses being East Mediterranean and Black Sea 169
Source: Lloyd’s List Intelligence Casualty Statistics confirmed after year-end. The Japan, Korea and North China 126
Data Analysis & Graphic: Allianz Global Corporate & Specialty
average variance over the past nine British Isles, N. Sea, Eng. Channel and Bay of Biscay 89
years has been an increase of fewer Arabian Gulf and approaches 62
than three total losses per year.
West African Coast 51
However, in some years this varies,
West Mediterranean 48
with up to 13 additional losses being
East African Coast 34
notified for one year.
TOTAL LOSSES BY YEAR Shipping losses have declined by 38% over the
past decade - from 151 in 2008 to 94 in 2017.
Russian Arctic and Bering Sea 29
A DECLINING TREND Bay of Bengal 28
Other 241
Total 1,129
200
Source: Lloyd’s List Intelligence Casualty Statistics
Data Analysis & Graphic: Allianz Global Corporate & Specialty
151
150
130 127 125
112 2008 to 2017: The 2017 accident year (94) represents a significant
97 106
89 98 94 improvement on the rolling 10-year loss average (113) – down 17%.
100
South China, Indochina, Indonesia and Philippines (252 total losses)
has been the top loss hotspot for a decade.
50
There have been 1,129 total losses over the past decade.
Three shipping regions account for almost half (48%) of all losses
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 over the past 10 years.
Source: Lloyd’s List Intelligence Casualty Statistics
Data Analysis & Graphic: Allianz Global Corporate & Specialty
8 9
MAJOR LOSSES: 2017 LARGEST SHIPS LOST
STELLAR DAISY
March 31, 2017. Sank after taking on water following hull
LARGEST SHIPS LOST crack, approximately 3,700km off the coast of Uruguay.
22 crew missing.
10 LARGEST VESSELS LOST FROM JANUARY 1, 2017 TO DECEMBER 31, 2017 148,431 GT Half of the 10
(showing approximate location of loss and type of vessel) largest ships
THERESA ARCTIC reported as total
losses in 2017 were
June 20, 2017. Grounded on reefs off Kilifi, Kenya.
bulk carriers
Refloated. Sent for scrap.
43,414 GT
MELITE
July 26, 2017. Grounded at Pulau Laut, Indonesia.
Hull damage.
39,964 GT
MED
STAR SAINT Fire was the cause
NEKTARIS EMERALD STAR of loss for three of
October 13, 2017. Sank off the coast of the Philippines. the 10 largest
11 crew missing. vessels lost
MAERSK
PEMBROKE 33,205 GT
MELITE EMERALD
STAR
NORM MAERSK PEMBROKE
August 22, 2017. Fire broke out approximately 400km off
Isles of Scilly. Extinguished. Towed and sold for break-up
KEA 31,333 GT
TRADER
BULK NORM The Stellar Daisy
CHEMICAL/PRODUCT August 30, 2017. Engine malfunction near Rondo Island, was the largest
STELLAR MUTIARA
CONTAINER DAISY SENTOSA 1 Indonesia. Towed. Sent for demolition. vessel lost last year
THERESA
PASSENGER ARCTIC 25,190 GT
KEA TRADER
Source: Lloyd’s List Intelligence Casualty Statistics
Data Analysis & Graphic: Allianz Global Corporate & Specialty
July 12, 2017. Ran aground on the Durand reefs off Mare,
New Caledonia. Damaged beyond repair.
25,145 GT
“The frequency and severity of total losses declined over the past year, continuing
the positive trend seen over the past decade. Claims have been relatively benign MED STAR
June 15, 2017. Fire broke out off Rhodes, Greece.
due to lower shipping activity in some maritime industry segments but reflecting Extinguished. Towed and sent for break-up.
mainly improved ship design, positive effects of risk management policy and 16,776 GT
shipping safety regulation over time. SAINT NEKTARIS
February 28, 2017. Engine failure at Varna, Bulgaria.
“However, as the use of new technologies on board vessels grows, we expect to see Towed to scrapyard pier.
changes in both the risk profile of shipowners and the maritime loss environment 13,697 GT
in future. Insurers will have to deal with a growing number of more technical MUTIARA SENTOSA 1
claims - such as cyber incidents or technological defects - in addition to May 19, 2017. Fire broke out near Masalembu Island
in the Java Sea. 5 fatalities, several missing.
traditional losses, such as collisions or groundings.” 12,365 GT
Baptiste Ossena
Global Product Leader, Hull and Marine Liabilities, AGCS
10 11
Allianz Global Corporate & Specialty Safety and Shipping Review 2018
TOTAL LOSSES BY TYPE OF VESSEL
2008 - 2017 Cargo, fishery, bulk, passenger and tug
are the vessel types that have seen the
Cargo vessels accounted for over half
of all total losses during 2017, with
activity up year-on-year from 34 in
most total losses over the past decade. 2016 to 53 in 2017 (an increase of 56%
year-on-year).
TOP 5 VESSEL TYPES LOST 2017 REVIEW
Fishing, passenger and tug losses
80
were down year-on-year. Bulk and TOTAL LOSSES BY TYPE OF VESSEL
tanker losses increased. JANUARY 1, 2017 TO DECEMBER 31, 2017
70
Cargo
Cargo Cargo 53% 53
60 FisheryFishery 8% 8
Bulk 7%
Bulk 7
Fishery 50 Passenger 5%
Passenger 5
Tug 5%
Tug
Chemical/Product 4% 5
40 Chemical/Product
Container 3% 4
Bulk DredgerContainer 3% 3
30 Supply/Offshore
Dredger 2% 3
TankerSupply/Offshore 2% 2
20 Barge Tanker 1% 2
Passenger
Other Barge 1% 1
10 Other 1
Total 94
Tug
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: Lloyd’s List Intelligence Casualty Statistics
Data Analysis & Graphic: Allianz Global Corporate & Specialty
TOTAL LOSSES BY TYPE OF VESSEL: 2008-2017
Passenger ship total losses halved over the past
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 TOTAL year to 5 losses, with activity located in the top
Cargo 59 52 61 38 62 41 31 40 34 53 471 hotspots of the South China waters and the
Fishery 36 29 21 14 12 13 15 16 10 8 174 Mediterranean. Fire was the cause of 3 losses.
Bulk 8 10 11 14 10 15 5 13 5 7 98
Cargo (42%) and fishing Passenger 5 5 3 7 7 8 10 7 11 5 68
vessels (15%) account for Tug 7 5 7 2 6 7 7 6 7 5 59
almost 60% of the 1,129
Chemical/Product 7 9 6 2 8 10 2 3 7 4 58
total losses over the past
decade. Ro-ro 8 6 1 3 5 2 5 6 9 45
Container 2 4 5 3 6 4 4 5 4 3 40
Other 5 5 3 5 3 6 4 4 3 1 39
Supply/Offshore 1 3 2 2 3 2 3 3 2 2 23
Dredger 5 2 2 1 1 1 1 3 16
Tanker 3 2 3 4 1 1 2 16
Barge 3 1 3 1 3 1 12
LPG 1 1 1 1 1 5
Unknown 1 1 2 1 5
Total 151 130 127 97 125 112 89 106 98 94 1,129
Source: Lloyd’s List Intelligence Casualty Statistics
Data Analysis & Graphic: Allianz Global Corporate & Specialty
12 13
Allianz Global Corporate & Specialty Safety and Shipping Review 2018
TOTAL LOSSES BY CAUSE Foundered (sunk/submerged) has
2008 - 2017 Foundered, wrecked/stranded, fire/explosion, machinery
damage and collision are the most frequent causes of
been the cause of over half of all total
losses over the past decade. It
accounted for an even higher share of
loss at sea over the past decade. all losses through 2017 (65%). Bad
weather is often a factor. 2017 REVIEW
TOP 5 CAUSES OF LOSS
CAUSES OF TOTAL LOSS
80
JANUARY 1, 2017 TO DECEMBER 31, 2017
70
Cargo 53%
Foundered
Fishery 8%
60 Bulk 7%
Passenger 5%
Wrecked/stranded 50 Tug Foundered 5% 61
Chemical/Product
Wrecked/stranded 4% 13
Container
Machinery damage/ 3%
40 8
Dredgerfailure 3%
Fire/explosion Supply/Offshore
Fire/explosion 2% 6
30 TankerHull damage 2% 5
Barge Collision 1% 1
20 Other Total 1% 94
Machinery damage
10 Source: Lloyd’s List Intelligence Casualty Statistics
Data Analysis & Graphic: Allianz Global Corporate & Specialty
Collision
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
The number of total losses caused by fire and explosion
halved year-on-year to 6, although three of these
vessels were among the 10 largest lost.
ALL CAUSES OF TOTAL LOSS: 2008 - 2017
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 TOTAL
Don’t bother leaving port...
Foundered (sunk, submerged) 73 61 64 45 55 70 50 66 48 61 593
Wrecked/stranded (grounded) 34 23 24 29 27 21 18 20 20 13 229 The unluckiest ship of 2017 is a passenger ferry operating in
Fire/explosion 16 14 12 9 13 15 6 9 12 6 112 the East Mediterranean and Black Sea region. It was involved
Machinery damage/failure 8 7 4 6 15 2 5 2 10 8 67 in seven reported incidents in just 12 months, all caused by
Collision (involving vessels) 13 13 10 3 5 2 2 7 1 1 57 machinery/damage failure.
Hull damage (holed, cracks, etc.) 4 8 4 3 7 1 5 2 4 5 43
Miscellaneous 1 2 6 1 1 1 2 1 15
Contact (e.g harbor wall) 1 1 2 1 5
Missing/overdue 1 1 2 4
Piracy 1 2 1 4
Total 151 130 127 97 125 112 89 106 98 94 1,129
14 15
Allianz Global Corporate & Specialty Safety and Shipping Review 2018
TOTAL LOSSES IN ALL REGIONS: 2017 2017 REVIEW
2017: The East Mediterranean and ALL CASUALTIES INCLUDING TOTAL LOSSES: 2017
Black Sea region has been the TOP 10 REGIONS
This map shows the approximate locations of all reported total losses during 2017. location of the most shipping
incidents (casualties) for the past six Region Casualty Total Year-on-year change
years. However, 2017 saw a significant East Mediterranean and Black Sea 464 ↓ 101
decline in activity – 18%. British Isles, N. Sea, Eng. Channel and Bay of Biscay 430 ↑ 58
1
S. China, Indochina, Indonesia and Philippines 263 ↑ 18
1 Russian Arctic and
Canadian Arctic
and Alaska Iceland and Bering Sea Machinery damage is the top cause Baltic 162 ↑ 21
1 Northern Norway
of incidents around the globe, Great Lakes 145 ↑ 30
8
2 accounting for 42% of casualties,
Japan, Korea and North China 142 ↑ 17
Baltic
30 6 followed by collision (13%) and
West Mediterranean 122 ↑ 14
British Isles, N. Sea, 17 wrecked/stranded (12%).
Eng. Channel and
Bay of Biscay
North American West Coast 114 ↓ 29
4 Japan, Korea and Newfoundland 110 ↑ 40
North China
There were 2,712 casualties reported during 2017. These
6 Iceland and Northern Norway 101 ↑ 19
West Mediterranean figures include total losses of 94 during this period. This
1 East Mediterranean total is up year-on-year, driven by a rise in machinery Other 659
Gulf of Mexico and Black Sea
S. China, Indochina,
Indonesia and Philippines damage/failure incidents. Total 2,712
2 2 Arabian Gulf
West Indies and approaches 2
Source: Lloyd’s List Intelligence Casualty Statistics
South Pacific 3 2 Data Analysis & Graphic: Allianz Global Corporate & Specialty
Bay of
Bengal
East African Coast
West African Coast
1
South American
West Coast 5
2008 - 2017 REVIEW
TOTAL
94 S. Atlantic and
East Coast S. America 2008-2017: The East Mediterranean
and Black Sea region is also the
ALL CASUALTIES INCLUDING TOTAL LOSSES: 2008 - 2017
TOP 10 REGIONS
location with the most shipping
incidents over the past decade (4,618). Region Total
East Mediterranean and Black Sea 4,618
Regional loss rankings Losses % Share Of the 25,967 reported casualties British Isles, N. Sea, Eng. Channel and Bay of Biscay 4,086
1 South China, Indochina, Indonesia & Philippines 30 32% over the past decade, approximately S. China, Indochina, Indonesia and Philippines 2,285
2 East Mediterranean and Black Sea 17 18% a third were caused by machinery Baltic 1,661
3 British Isles, North Sea, English Channel and Bay of Biscay 8 9% damage (8,532), followed by collision Japan, Korea and North China 1,618
4 Arabian Gulf and approaches 6 6% (3,787) and wrecked/stranded (3,740).
Great Lakes 1,274
Japan, Korea and North China 6 6% Iceland and Northern Norway 1,060
These figures include total losses
6 South Atlantic and East Coast South America 5 5% West Mediterranean 948
of 1,129.
7 West Mediterranean 4 4% North American West Coast 898
8 West African Coast 3 3% West African Coast 707
9 Baltic 2 2% Other 6,812
Bay of Bengal 2 2% Total 25,967
East African Coast 2 2%
South Pacific 2 2% Source: Lloyd’s List Intelligence Casualty Statistics
Data Analysis & Graphic: Allianz Global Corporate & Specialty
West Indies 2 2%
14 Canadian Arctic and Alaska 1 1%
21 Gulf of Mexico
Iceland and Northern Norway
1
1
1%
1%
Russian Arctic and Bering Sea 1 1%
South American West Coast 1 1%
losses from
bad weather Source: Lloyd’s List Intelligence Casualty Statistics
Data Analysis & Graphic: Allianz Global Corporate & Specialty
16 17
Allianz Global Corporate & Specialty Safety and Shipping Review 2018
CASUALTIES
“There is always the need to strike the right “There are many good reasons why a captain
balance between safety and commercial may deviate from procedures in order to avoid
pressures. We all have to meet deadlines in our an incident, but they may also do so to save
working lives, but commercial factors can lead time. There is simple information available that
to undue pressures on board. We have to make can help us to understand these types of
sure this is understood and addressed and look behavioral issues,” says Khanna.
BEHAVIORAL AND
more closely at human nature – not just human
error – both on board and onshore. We need to Analyzing complex or unstructured data like
look at behavior modification and how to get voice recorders is still some way off. However,
crew and personnel to move away from simple data like weather, vessel speed and
CULTURAL RISK STILL
normalizing risk.” location can be analyzed 24/7 and compared
with benchmarks. For example, ships are
According to Khanna, the use of technology is required to keep a minimum clearance between
vital in addressing this: “Technology can help the keel and the sea bed, but an automatic alert
NEEDS ADDRESSING better understand the behavior and decision-
making process of seafarers. By analyzing data
24/7 we can gain new insights from crew
behavior and near-misses that can help us to
can be created if this is not maintained.
“We have the data. How we make best use of it will
be key,” says Khanna. “At the moment, it is down to
identify trends that are behind human error shipowners to use data to improve safety but there
Human error continues to be a major driver of shipping incidents being the main cause of accidents.” is no reason why the International Maritime
Organization (IMO) or other industry associations
across the board. Better use of data and analytics could help Operators are beginning to use Voyage Data cannot take the lead and be more proactive.”
change behavior and significantly improve safety. Recorder (VDR) analytics to improve safety and
risk behavior, but this has so far focused on By using such technology, tragic losses could be
periodic analysis of data. The industry needs to avoided in future. “Analysis of the decision-
go further, Khanna believes. making process of the captain and officers can
be the difference between a safe voyage and a
Despite decades of improvements in maritime “Understanding human behavior and how it can “It is no longer sufficient to analyze data just disaster,” says Khanna.
safety regulation, training, technology and risk lead to accidents is the missing link in the once or twice a year. It should be done in ‘real
management, fatal accidents at sea persist. And shipping industry today. We need to understand time’. The industry needs to be proactive and not However, greater deployment of technology
human behavior is often a factor, with many how and why seafarers make decisions, especially reactive. We have, in the past, learned from doesn’t mean becoming over-reliant, adds Chris
captains and crews operating in an increasingly when this deviates from protocols and training.” losses, but predictive analysis is important. This is Turberville, Head of Marine Hull & Liabilities,
time- and resource-pressured industry. It is possible with technology already available.” UK, AGCS.
estimated that 75% to 96% of marine accidents Inadequate shore-side support and commercial
can be attributed to human error1 . Furthermore, pressures have an important role to play in Some operators are now starting to continually “This brings its own risks. Continual training is
AGCS analysis of almost 15,000 marine liability maritime safety and risk exposure, Khanna monitor bridge data recorders, looking to therefore imperative to ensure the right balance
insurance claims between 2011 and 2016 shows believes. “These can push people to make identify any deviation from procedures, which is achieved between technology and human
that human error is a primary factor in 75% of decisions that lead to mistakes and accidents. would raise an alarm to alert ship managers in intervention.”
the value of all claims analyzed – equivalent to At times, captains can be under commercial real time. While not perfect, this gives operators
over $1.6bn of losses. pressure to cut corners.” far greater information on what is happening on
board and the decisions being made. Cargo
TOP CAUSES OF LIABILITY LOSS: MARINE 53%
In recent years, a number of major casualties Captains and crews are under increasing (BY VALUE OFFishery
CLAIMS) 8%
have been linked to human error, including the pressure as shipping supply chains are Bulk 7%
sinking of the El Faro (see page 23) in late 2015 streamlined for greater efficiency. While vessels Passenger 5%
and the grounding of the Costa Concordia in once spent weeks in port, turn-around times for Tug 5%
2012. More recently, the sinking of the oil tanker a cargo vessel are now measured in days. And Human error
Chemical/Product
75%
4%
Sanchi in January 2018 and the collisions of the tight schedules can have a detrimental effect on Accidental nature/damage
Container 18%
3%
USS Fitzgerald and the USS John S. McCain safety culture and decision-making. Natural hazards 1% 3%
Dredger
navy ships with commercial vessels in Asia1996 Regina Maersk 6,400 teu
1997 Susan Maersk 8,000+ teu
Allianz Global Corporate & Specialty Safety and Shipping Review 2018
2002 Charlotte Maersk 8,890 teu
INDUSTRY’S STRUGGLE
2003 Anna Maersk 9,000+ teu
50 YEARS OF CONTAINER SHIP GROWTH
2005 Container-carrying capacity
Gjertrud Maersk has teu
10,000+
increased by almost 1,500% since 1968
WITH CONTAINER SHIP
1968 Encounter Bay 1,530 teu 2006
1972 Hamburg Express 2,950 teu Emma Maersk 11,000+ teu
1980 Neptune Garnet 4,100 teu
2012
FIRES CONTINUES
1984 American New York 4,600 teu Marco Polo (CMA CGM) 16,000+ teu
1996 Regina Maersk 6,400 teu
2013
Maersk Mc-Kinney Møller 18,270 teu
1997 Susan Maersk 8,000+ teu
2002 Charlotte Maersk 8,890 teu 2015
There are a number of issues driving MSC Oscar 19,000+ teu
container ship fire exposures, including 2003 Anna Maersk 9,000+ teu
2017
OOCL Hong Kong 21,413 teu
the adequacy of fire-fighting capabilities, 2005 Gjertrud Maersk 10,000+ teu
ongoing problems with misdeclaration of 2006 2019
24,000 teu
cargo, salvage challenges and how long Emma Maersk 11,000+ teu ?
it can take to access ports of refuge. 2012
Approximate ship capacity data: Container-transportation.com; AGCS Source: Allianz Global Corporate & Specialty (AGCS)
Marco Polo (CMA CGM) 16,000+ teu
2013
Maersk Mc-Kinney Møller 18,270 teu
Major fires on container vessels are The incident is not the first major fire can
2015 make fighting fires challenging.
MSC Oscar 19,000+ teu
“Improved fire-fighting equipment on
among the largest hazards for the to involve a large container vessel in The salvage of ULCS also represents board ULCS and correct cargo
global shipping industry and the recent times. In 2017, the 13,800 teu unchartered waters, as, due to their declaration and storage should
insurance industry’s fears of a major
cargo ship fire was realized on March
MSC Daniela was on fire for more
than a week, off the coast of Sri
2017
size, there are only a small number
OOCL Hong of teugreatly reduce the risk of fire,” says
Kong 21,413
ports that can accommodate them and Volker Dierks, Head of Marine Hull
12%
of global container
7, 2018, with a fire on board the ultra- Lanka. There were a number of provide safe refuge following a fire.” Underwriting, AGCS Central & trade comprises
2019
large container ship (ULCS) Maersk incidents during 2016 including the ? 24,000 teu Eastern Europe. dangerous goods3
Honam. The 353-meter vessel caught 9,000 teu CCNI Arauco, which caught Insurers such as Allianz and the
fire southeast of Oman en route from fire in Hamburg. In 2012, a fire International Union of Marine “The issue of fires on ULCS has been
Singapore to Suez. The fire was onboard the German container ship Insurance (IUMI) have previously raised by insurers but it appears to
stopped at the superstructure and the MSC Flaminia burned for six warned of safety concerns and are have fallen on deaf ears. As an insurer,
crew members were evacuated. weeks, resulting in the death of three promoting improved ship design and we would like to see an urgent review
Tragically, five died. crew, the destruction of 70% of the fire-fighting equipment to prevent and by the IMO and class societies, or at
cargo and the vessel being declared a extinguish fires on ULCS. the very least a study into the
The salvage operation was constructive total loss2 . adequacy of current requirements
challenging. It took five days to bring
the fire under control, and a further “ULCS’ can create a serious exposure
“While fire-fighting systems have
developed to ensure the crew are able
and controls,” says Khanna. 65%
Increase in incorrectly
Photo: Adobe Stock seven weeks before the vessel could and risk for shipowners and insurers,” to ensure their safety, and thereby Bigger ULCS are on their way. More declared dangerous
be towed to a suitable port of refuge says Khanna. Fire-fighting capabilities complying with International than 20 ships in excess of 18,000 teu goods during 20154
What’s in a teu?
Container ship capacity is measured in – Jebel Ali in the UAE – for unloading. on board have not necessarily kept Convention for the Safety of Life At are expected to enter into service
20-foot equivalent units (teu). Typical It was carrying 7,860 containers, pace with the increasing vessel sizes. Sea (SOLAS) requirements, fire- during 2018, followed by another 30 in
loads are a mix of 20-foot and 40-foot corresponding to 12,416 teu, when the ULCS’ provide economies of scale for fighting capabilities on board have 2019. Meanwhile, there have been at
containers. The world’s largest
container ship – the 21,000+ teu OOCL incident occurred. At the time of shipping companies but the industry not kept up with the upsizing of least 20 orders for 22,000 teu vessels
Hong Kong1 – has the capacity to carry writing, the cause of the fire is needs to make sure that risk container vessels, to ensure the from companies such as the
around 21,000 containers, which can unknown, but the ULCS is less than a management and safety standards preservation of the vessel itself,” says Mediterranean Shipping Company
be laden with anything from cars to
electrical goods to shoes. And 22,000+ year old and was fitted with up-to- are brought up to speed. Turberville. “This is one of the most and CMA CGM. And 24,000 teu ships
teu vessels are coming soon. date fire-fighting equipment. The significant safety issues on board this have been predicted to quickly follow.
incident is expected to be one of the
largest general average claims on
“Despite International Maritime
Organization (IMO) requirements that
type of vessel and there needs to be
considerable development to protect
$500m
Annual supply chain
record, (in the hundreds of millions of shippers declare container contents, container ships in the event of fire.” losses related to
dollars). A total loss could have seen there are still many cases where cargo packing failures3
damages in excess of $1 billion. is not being properly declared. This
1 OCL, OOCL Japan Named. Sister Vessel OOCL Hong Kong Achieved A Guinness World Records Title
O
2 International Union of Marine Insurance
3 International Cargo Handling Coordination Association
4 Container Management, Hapag-Lloyd Warns of 65% Increase in Mislabelling of Dangerous Goods
20 21Allianz Global Corporate & Specialty Safety and Shipping Review 2018
SAFETY First steps taken to address
autonomous shipping:
The IMO’s senior technical body, the
length and over (with a view to
alignment with the 2012 Cape Town
Agreement) and pleasure yachts
NTSB publishes El Faro report
On October 1, 2015, the US cargo ship El Faro sailed
RESPONSES
Maritime Safety Committee (MSC), above 300 gross tonnage not directly into Hurricane Joaquin, sinking with the loss of 33
announced at its 99th session meeting engaged in trade. crew – the deadliest US maritime disaster for over 30 years.
in May 2018 that it will start looking at
how safe, secure and environmentally- New ships’ routing measures in Published in February 2018, the final report into the
ROUND-UP
sound autonomous ship operations Bering Sea adopted: sinking by the US National Transportation Safety Board
(see page 40) may be addressed in The MSC has also adopted new and (NTSB) outlines the factors which contributed to the
IMO conventions. The committee amended ships’ routing measures in incident – weather, machinery failure and flooding of the
endorsed a framework for a the Bering Sea and Bering Strait, cargo hold, as well as the lack of a damage control plan
regulatory scoping exercise. aimed at reducing the risks of and inadequate safety equipment.
The United Nations’ global shipping incidents – the first measures adopted
Updating the International Maritime by IMO for the Arctic region where the The NTSB2 concluded that the probable cause of the
regulator, the International Maritime Dangerous Goods (IMDG) Code: Polar Code applies. It accepted a sinking was the captain’s insufficient action to avoid the
Organization (IMO) has continued its The IMO has adopted amendments to proposal to create six two-way routes hurricane, failure to use the most up-to-date weather
update the IMDG Code (Amendment for vessels traveling between the information, and the late decision to muster the crew. It
commitment to safety improvements 39-18) in line with the latest United Arctic and Pacific oceans. In addition, also drew attention to ineffective bridge resource
in the sector with a number of recent Nations Recommendations on the for ecological reasons, protective management, inadequate company oversight, and the
Transport of Dangerous Goods, which zones will be established around safety management system.
initiatives1. sets the basic requirements for all Nunivak Island, St Lawrence Island
transport modes. The amendments and King Island. In response to the loss, there are plans to introduce a new
include new provisions regarding IMO bill. The Maritime Safety Act of 2018 includes provisions
type 9 tanks, a set of new Seating in survival crafts: to ensure proper vessel inspections are undertaken and
abbreviations for segregation groups The MSC has also considered the that vessels have necessary safety equipment and timely
Photo: Rolls-Royce Ship Intelligence, flickr.com
and new special provisions for issue of personal mobility and weather charts.
carriage of lithium batteries and for practical seating capacity in survival
carriage of vehicles powered by crafts. The way they are designed
flammable liquid or gas. The today leaves seafarers and
amendments are expected to enter passengers with very little space, so Sanchi oil tanker collision
into force on January 1, 2020. they cannot move around the craft for
sanitary or medical reasons, for When the Panamanian-flagged Suez max crude oil tanker
The second phase of the Polar Code: example. The MSC agreed there is an Sanchi collided with the Hong Kong-flagged cargo ship
The International Code for Ships urgent need to implement a minimum CF Crystal in January 2018 it led to one of the worst tanker
Operating in Polar Waters (Polar standard for personal mobility and incidents for several decades.
Code) entered into force in January seating space in survival crafts by
2017 under both SOLAS and The developing new regulation. After burning for more than one week, the Sanchi
International Convention for the eventually sank off the coast of Shanghai, China. The
Prevention of Pollution from Ships Interim guidelines for the entire crew of 32 died in the incident, which was also the
(MARPOL) treaties. It provides harmonized display of navigation worst tanker spill in 35 years, according to the International
additional requirements for ships information received via Tanker Owners Pollution Federation.
trading in Arctic waters and the communication equipment:
Antarctic area. The MSC is considering IMO interim guidelines aim to ensure At the time of the collision, the Iranian-owned Sanchi was
how the safety measures of the Polar that information is displayed in an carrying 1 million barrels of condensate – a highly
Code might be applied in the future to efficient, reliable and consistent flammable, ultra-light crude oil – from Iran to South Korea.
non-SOLAS vessels operating in polar format, in a manner that is easily The nature of condensate limited the extent of pollution
waters and has agreed that the interpreted for the seafarer to support and environmental impact.
development of such safety measures decision-making.
should focus on fishing vessels, The cause of the collision is not known at time of writing,
pleasure yachts above 300 gross although human error is likely to have played a part. China
tonnage not engaged in trade and has opened an investigation into the collision and the
cargo ships below 500 gross tonnage Sanchi’s black box, containing the ship’s sailing data and a
down to 300 gross tonnage. It will voice recorder, was recovered before the vessel sank.
develop recommendatory safety
measures for the following types of Tanker safety has improved significantly since a number of
vessels when operating in polar major pollution incidents led to improved ship design and
waters: fishing vessels of 24m in improvements in risk management in the 1990s. However,
the large loss of life on board the Sanchi is likely to focus
The IMO has taken its first steps towards
addressing autonomous shipping. 2 T he National Transportation Safety Board, Sinking of US Cargo attention on the adequacy of fire protection for crew.
1 M
aritime Safety Committee, 99th session, May 16- Vessel SS El Faro Atlantic Ocean, Northeast of Acklins and
25, 2018, International Maritime Organization Crooked Island, Bahamas, October 1, 2015
22 23Allianz Global Corporate & Specialty Safety and Shipping Review 2018
The three powerful storms which struck the
Caribbean and southern United States in 2017
CLIMATE
provide a clear reminder to the shipping sector
that traditional maritime risks should not be
overlooked.
“For whatever reason, we are witnessing a rise in
the frequency and severity of extreme weather
events, while rising sea levels will mean an
increased risk of flooding and storm surge for
RECORD-BREAKING
coastal areas and ports,” explains Kinsey.
In September 2017, Hurricane Irma caused
major disruption to the fuel market in Florida,
HURRICANE SEASON
first by creating increased demand and then by
disrupting the supply chain. As people fled the
approaching hurricane, it generated a spike in
demand for fuel, adding to logistical pressures
BRINGS SUPPLY
already created by Hurricane Harvey, which
struck Texas just over a week earlier. Between
August 21 and August 28, 2017 when Harvey
made landfall in Texas, retail gasoline prices in
CHAIN PRESSURE
Florida and Miami increased 10 cents per gallon
and 5 cents per gallon1 respectively.
“The events of 2017 have shown that shippers
need to look at the seasonal impact of
hurricanes across a region, and not just one
specific event. Storms can build on top of each
The impact of Harvey, other and as one port recovers from a storm it
can impact the ability of another port to
Irma and Maria (HIM) in prepare for the next one,” says Kinsey.
particular highlights the Harvey, Irma and Maria affected parts of Texas,
Louisiana and Florida in the space of just one
fragile nature of just-in- month. As each storm struck, it caused freight to
be redirected to other ports, with a knock-on
time supply lines and impact for rail and truck shipments across the
region. Major ports along the Gulf Coast and
the need to consider Caribbean, including Houston and Miami, were
closed for up to a week after the hurricanes,
multiple events in causing delays in cargo shipments and cruise
ship operations.
contingency planning.
“When drawing up contingency plans, shippers
need to consider scenarios where multiple
locations are impacted. Look at the whole
season and not just what happens if a storm hits
a particular location,” advises Kinsey.
Photo: iStock
In addition to causing significant damage across southern US and the 1 U
S Energy Information Administration Weekly Survey of Gasoline Prices
Caribbean, 2017’s hurricanes caused delays in cargo shipments.
24 25Allianz Global Corporate & Specialty Safety and Shipping Review 2018
SUPERSTORMS
POSE FUTURE
CHALLENGES
FOR YACHT
MARKET
Hurricanes Harvey, Irma and Maria
also damaged or destroyed
thousands of pleasure craft in the
Caribbean and US, raising
questions over the insurability of
vessels remaining in the region
during the season.
Photo: iStock
The 2017 hurricane season resulted in a large number of pleasure craft insurance claims.
According to the Boat Owners “The yacht insurance market saw insurers have quit the market due to
Association of The United States, some large losses from the 2017 hurricane losses and many are now considering TOP 5 RISKS IN MARINE & SHIPPING
63,000 boats were damaged by season. While larger permanently- under what circumstances they can Figures represent how often a risk was selected as a percentage of all
Harvey and Irma in the US alone, at a manned vessels are able to sail away continue to cover yachts in hurricane- responses for that industry sector.
cost of an estimated $655 million1 . For from storms, many smaller pleasure exposed regions, especially during the Responses: 104
months after the storms, salvage teams craft were not as well-informed or actual hurricane season,” says Dierks.
Figures don’t add up to 100% as up to three risks could be selected.
recovered large and small craft that alert to the hurricane activity,” says
either sunk or were run-aground on Dierks. “Many remained in the area
beaches, coral reefs and mangroves and were not adequately-secured.” Rank Percentage 2017 rank Trend
– 1,500 vessels were salvaged in 1 Natural catastrophes (e.g. storm, flood, earthquake) 34% 4 (23%) ↑
Florida after Hurricane Irma alone Following the storms, the insurance 2 Business interruption (incl. supply chain disruption) 31% 2 (28%) –
and 459 boats were recovered in the market is reconsidering the adequacy 3 Cyber incidents (e.g. cyber crime, IT failure, data breaches) NEW 31% – ↑
United States Virgin Islands. of premiums for pleasure craft 4 Theft, fraud, corruption 27% 2 (28%) ↓
exposed to hurricanes, as well as how 5 Fire, explosion NEW 25% – ↑
The series of storms have prompted the risk can be covered in the future.
debate within the marine insurance Source: Allianz Risk Barometer 2018
market about the insurability of “The 2017 hurricane season was a
pleasure craft in the region during wake-up call and resulted in a large
hurricane season. number of pleasure craft claims. Some
1 B
oatUS, Harvey and Irma Damage Or Destroy More Than 63,000 Recreational Boats
26 27Allianz Global Corporate & Specialty Safety and Shipping Review 2018
ARCTIC CIRCLE WATERS
FAST-CHANGING ARCTIC
CAUSES OF CASUALTIES (SHIPPING INCIDENTS) 2008-2017
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 TOTAL
Machinery damage/failure 13 14 16 12 13 20 27 46 32 46 239
AND NORTH ATLANTIC
Wrecked/stranded 11 14 9 9 8 10 14 6 11 9 101
Miscellaneous 1 4 4 2 6 5 5 6 4 6 43
Collision 1 4 10 4 4 2 3 2 4 34
CONDITIONS BRING
Fire/explosion 1 2 6 6 1 4 2 4 1 3 30
Contact (e.g. harbor wall) 1 2 4 1 3 6 4 5 1 1 28
Hull damage 1 6 2 2 1 2 1 1 2 2 20
ROUTE RISKS
Foundered 1 2 3 1 1 2 1 11
Labor dispute 1 1
Total 30 48 51 39 37 50 55 71 55 71 507
Climate change is impacting ice hazards for shipping, Including 16 total losses
Source: Lloyd’s List Intelligence Casualty Statistics ARCTIC CIRCLE WATERS
CAUSES OF CASUALTIES (SHIPPING INCIDENTS) 2017
freeing up new trade routes in some areas, while Data Analysis & Graphic: Allianz Global Corporate & Specialty
increasing the risk of ice in others.
There was another milestone for Arctic shipping in early remote hostile environment like the Arctic could prove There is also a threat of ice hazards in more southerly
2018 when a specially-designed LNG tanker became the challenging, and would be a long way away from salvage shipping routes from icebergs. At the end of 2017, the US
first commercial ship to travel the Northern Sea Route in teams,” says Dierks. Coast Guard’s International Ice Patrol warned shipping
winter and without the assistance of an ice breaker. The companies that an unusual number of icebergs were
Eduard Toll successfully journeyed from South Korea to In February 2018, China announced plans for an “Arctic drifting into shipping lanes. It found that over 1,000
Montoir, France via northern Russia, shaving around 3,000 Silk Road” by developing shipping lanes opened up by icebergs had drifted into North Atlantic shipping lanes in
nautical miles off the traditional transit via the Suez Canal. global warming. China said it would encourage 2017, marking it the fourth consecutive season where the
infrastructure development and conduct commercial trial danger has been classified as “extreme”. 4
It followed the transit in August 2017 of another specially- voyages in Arctic waters, with plans to build its first Polar
designed tanker, the Christophe de Margerie, which expedition cruise ship by 20193 . “Such extraordinary conditions require complementary
became the first merchant ship to sail across the Arctic training for crew, as well as additional routing support,”
Ocean without the aid of an icebreaker. It took just 19 days At the beginning of 2017 the International Code of Safety says Arnaud Gibrais, a Senior Marine Risk Consultant at
to reach South Korea from Norway, almost a week faster for Ships Operating in Polar Waters (Polar Code) came AGCS, based in Paris. Machinery damage/failure 46
than going via the Mediterranean. into force. The code introduces mandatory requirements Wrecked/stranded 9
for shipping in Polar regions, principally relating to ice “A melting Arctic could lead to an increase in icebergs Miscellaneous 6
Arctic ice has been thinning and retreating over the past navigation, manning and ship design. affecting trade routes, although this has not yet been a Collision 4
40 years, bringing new opportunities for shipping, but also problem for the major north, south, east or west shipping
Fire/explosion 3
serious environmental concerns. Research shows the mean “The Polar Code continues to be refined,” says Kinsey. lanes. But this might become more of an issue in the
center of shipping activity moved 300km north and east— “Arctic conditions are fast-changing and the normal future,” adds Dierks. Hull damage 2
closer to the North Pole—over a seven-year span1 . International Maritime Organization review updates are Contact (e.g. harbor wall) 1
too slow. For these new shipping routes we need to find Climate researchers at the University of Manitoba, Casualties 71
As a result, a growing number of vessels are sailing in faster ways to disseminate information and the lessons of Winnipeg have also claimed more Arctic sea ice is entering
Arctic waters. For example, cargo volumes on the Northern successful transits.” the North Atlantic Ocean, increasing the level of hazard for
Source: Lloyd’s List Intelligence Casualty Statistics
Sea Route (NSR) increased by nearly 40% to 9.7 million ships in late spring. Arctic sea ice blocked normally open
tons in 2017, the biggest annual volume ever, according to Ships operating in Arctic waters are bound by the Polar areas of ocean around Newfoundland in May and June Data Analysis & Graphic: Allianz Global Corporate & Specialty
the Russian Federal Agency for Maritime and River Code, but ice is also posing a significant hazard for 2017. The ice cover trapped many ships and even sunk
Transport 2 . This is expected to rise to 40 million tons by shipping elsewhere. some boats when it punctured hulls, the research found 5 . The analysis shows there were 71 reported shipping incidents in Arctic
Circle waters during 2017, including one total loss – up 29% year-on-
2022, reflecting the development of oil and gas fields, and year. Machinery damage/failure was behind over 60% of incidents,
70 to 80 million tons by 2030. Outside the Arctic and Antarctic, a number of so-called driven by the harsh operating environment. Fishing vessels were
conditional areas also carry a higher risk of ice, including involved in almost 40% of incidents.
1 N
ASA Earth Observatory
“Climate change could open up new shipping routes in the the Gulf of St. Lawrence, Alaska, Sakhalin, Russia and the 2 S
afety4Sea.com, Record cargo volumes shipped on Northern Sea Route in Machinery damage/failure is also the top cause of shipping incidents
Arctic, such as the North West Passage, and routes across Baltic Sea. Trading in these areas has also been increasing 2017, January 2018 in this region over the past decade, accounting for 47% of casualties.
Russia and Canada. These routes will have advantages as with global warming. 3 R
euters, China building up Arctic Cruise Ship For Polar Silk Road, March 2018
Wrecked/ stranded is the second major cause, accounting for 20%
4 G
Captain, Ice Patrol, More Than 1,000 Icebergs Drifted Into N.Atlantic Shipping
well as disadvantages. For example, a collision in a Lanes in 2017, December 2017
of incidents.
5 U
niversity of Manitoba, Arctic Sea Ice Becoming A Spring Hazard For North
Atlantic Ships
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