Marine insurer Allianz Global Corporate & Specialty (AGCS) on Monday (2 August) released the Safety & Shipping Review 2021 where it noted the shipping industry being likely to come under increasing pressure to accelerate its efforts on tackling climate change.
“A huge investment in research and development is required if the industry is to meet the challenging targets being set,” said Captain Rahul Khanna, Global Head of Marine Risk Consulting at AGCS.
“Today’s existing fleet and technology will not get the shipping industry to the International Maritime Organization’s target of a 50% cut in emissions by 2050, let alone the more ambitious targets being discussed by national governments.”
Captain Khanna, meanwhile, noted insurers seeing a number of machinery damage claims related to scrubbers, which remove sulphur oxides from exhaust gases for vessels using heavy marine fuel.
In some cases, the use of low-sulphur fuels has led to severe damage, and some significant claims for insurers from the cost of repairs and loss of earnings while awaiting repairs, often because critical spare parts were not available from stock. The cause of damage was often related to the cleaning of tanks, condition of filters, fuel stability and the effect of lube oil. Bunkering of fuels remains a complex issue, and poor fuels and poor handling of fuels constitute a significant risk for vessels.
The annual AGCS study analyses reported shipping losses and casualties (incidents) over 100 gross tons. During 2020, 49 total losses of vessels were reported globally, similar to a year earlier (48) and the second lowest total this century. This represents a 50% decline over 10 years (98 in 2011). The number of shipping incidents declined from 2,818 to 2,703 in 2020 (by 4%). There have been more than 870 shipping losses over the past decade.
The South China, Indochina, Indonesia and Philippines maritime region remains the global loss hotspot, accounting for one in every three losses in 2020 (16) with incidents up year-on-year. Cargo ships (18) account for more than a third of vessels lost in the past year and 40% of total losses over the past decade. Foundered (sunk/submerged) was the main cause of total losses over the past year, accounting for one in two vessels. Machinery damage/failure was the top cause of shipping incidents globally, accounting for 40%.
The full 58-page Safety & Shipping Review 2021 report can be downloaded here.
Photo credit: Allianz Global Corporate & Specialty
Published: 3 August, 2021
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