The 2024 Allianz Safety and Shipping Review notes that 26 large ships were lost worldwide last year – down by a third year-on-year, and the industry’s lowest ever total.

Around 90% of international trade is transported across the globe’s oceans.

Thirty years ago, the global shipping fleet lost around 200 large vessels a year, states the marine insurer’s newest report.

“However, the fact that shipping is increasingly subject to growing volatility and uncertainties from war and geopolitical events, the consequences of climate change, as well as ongoing risks resulting from the trend for larger vessels, means the sector will have its work cut out to maintain this status quo in future.”

“The speed and extent of the way the industry’s risk profile is changing is unprecedented in modern times,” notes Allianz Commercial Marine Risk Consulting global head captain Rahul Khanna.

“Conflicts such as in Gaza and Ukraine are reshaping global shipping, impacting crew and vessel safety, supply chains and infrastructure, and even the environment.

“Piracy is on the rise, with a worrying re-emergence off the Horn of Africa.

“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, decarbonisation,” says Khanna.

Fires, Drones and a Shadow Fleet
During 2023, 26 total losses were reported globally compared with 41 a year earlier.

There have been more than 700 total losses reported over the past decade (729).

The South China, Indochina, Indonesia and the Philippines maritime region is the global loss hotspot, both over the past year and decade (184).

It accounted for almost a third of vessels lost last year (8).

The East Mediterranean and Black Sea ranks second (6) with activity up year-on-year. 

Cargo ships accounted for more than 60% of vessels lost globally last year.

Foundered (sunk) was the main cause of all total losses, accounting for 50%.

Extreme weather was reported as being a factor in at least eight vessel losses around the world in 2023, with the final total likely higher, states the Allianz report.

The number of shipping incidents reported globally declined slightly last year (2 951 compared with 3 036), with the British Isles seeing the highest number (695).

Fires onboard vessels – a perennial concern – also declined.

However, there have still been 55 total losses in the past five years, and more than 200 fire incidents reported during 2023 alone (205) – the second highest total for a decade after 2022.

Recent incidents, such as in the wake of the conflict in Gaza, have demonstrated the increasing vulnerability of global shipping to proxy wars, disputes and geopolitical events, with more than 100 ships targeted in the Red Sea alone by Houthi militants in response to the conflict, adds the Allianz report.

“Disruption to shipping in and around the region has persisted and is likely to remain for the foreseeable future.”

The re-emergence of Somali pirates, following their first successful hijacking since 2017, is an additional cause for concern.

“Both the war in Ukraine and the Red Sea attacks have also revealed the increasing threat to commercial shipping posed by new technology such as drones, which are relatively cheap and easy to make, and difficult to defend against without a large naval presence,” says Khanna.

“Looking to the future, more technologically-driven attacks against shipping and ports are also a distinct possibility. Reports of vessels experiencing GPS interference are increasing, particularly in the Strait of Hormuz, the Mediterranean and the Black Sea.”

The Allianz report also notes that in the three years since Russia invaded Ukraine, the gradual tightening of international sanctions on Russian oil and gas exports has contributed to the growth of a sizable shadow fleet of tankers, at somewhere between 600 to 1 400 vessels.

“These are mostly older, often poorly maintained vessels that operate outside international regulation, often without proper insurance,” says Allianz Commercial Marine Hull global product leader Justus Heinrich.

“This situation presents serious environmental and safety risks. Vessels have been involved in at least 50 incidents to date, including fires, engine failures, collisions, loss of steerage, and oil spills.

“The cost of dealing with these incidents often falls on governments or other vessels’ insurers if one is involved in an incident.”