Large shipping losses have declined by more than a third (38%) globally over the past decade, according to Allianz Global Corporate & Specialty SE's (AGCS) Safety & Shipping Review 2018, with this downward trend continuing in 2017. Yet, incidents in the South China, Indochina, Indonesia and Philippine maritime region rose by 25% in the past year and the region was the Number One area worldwide for major shipping incidents for the past decade leading it to be dubbed the "new Bermuda Triangle" by some media commentators.
In 2017, almost a third of losses globally (32%) occurred in this region, driven by activity in Vietnamese waters. The major loss factors include weather – Typhoon Hato and Typhoon Damrey caused more than six losses – busy seas and lower safety standards on some domestic routes.
There were 94 total losses reported around the shipping world in 2017, down 4% year-on-year (98) – the second lowest in 10 years after 2014. Bad weather, such as typhoons in Asia and hurricanes in the US, contributed to the loss of more than 20 vessels, according to the annual review, which analyses reported shipping losses over 100 gross tons (GT).
“Globally, the decline in frequency and severity of total losses over the past year continues the positive trend of the past decade. Insurance claims have been relatively benign, reflecting improved ship design and the positive effects of risk management policy and safety regulation over time,” said Baptiste Ossena, Global Product Leader Hull & Marine Liabilities, AGCS.
However, disparities remain as losses in Asia rose year-on-year. The region accounted for the most—more than one in three—shipping losses in 2017. The East Mediterranean and Black Sea region is the second major loss hotspot (17) followed by the British Isles (8). There was also a 29% annual increase in reported shipping incidents in Arctic Circle waters (71), according to AGCS analysis.
Political tensions around major shipping routes in Asia are leading to disruption and a potential heightened risk of collision. Already a key transit route for east-west trade from China, South Korea and Japan and accounting for one-third of global shipping trade, the South China Sea is also the cause of territorial disputes between several countries within the region.
These territorial disputes have resulted in an increasing military presence in the South China Sea, with the US and China conducting naval exercises. Last year saw two major collisions between US naval ships and commercial vessels. The US-guided missile destroyer USS Fitzgerald collided with a container ship off Japan while another destroyer, the USS John S McCain struck an oil tanker off Singapore.
“The territorial claims and disputes may have larger implications long term and threaten the very freedom of the seas and navigation in South East Asia, with far reaching implications for trade with Asia. A growing concentration of trade and political tensions makes for a volatile situation in the region that could create safety issues,” said Andrew Kinsley, Senior Marine Risk Consultant AGCS
Piracy, the long-time bane of the maritime industry, has hit record lows globally but across Asia and Africa the threat remains high with regional waters accounting for three-quarters of all piracy incidents around the globe. Southeast Asia had 76 incidents in 2017 up 11% compared with a year earlier while Indonesia continues to be global hotspot for piracy with 43 attacks. The number of attacks in the Philippines more than doubled year-on-year from 10 in 2016 to 22 in 2017.
Analysis also shows Friday is the most dangerous day at sea – 175 losses of 1,129 total losses reported have occurred on this day over the past decade.
For Asia, November is the busiest month for losses over the past decade with 36 ships lost during this month, a third of which were caused by typhoons (12).