Total losses in shipping hit record lows in 2020, according to insurer Allianz's Safety and Shipping Review 2021, yet risks including the growing threats of piracy, concerns over the Ever Given incident and the effects of the crew change crisis still pose a threat to seafarers and the industry as a whole.
There were 49 total losses in 2020, representing a 50% decline over a decade. South China, Indochina, Indonesia and the Philippines were the global loss hotspots, accounting for a third of all losses last year.
The recent European Maritime Safety Agency (EMSA) report, Impact of Covid-19 on the Maritime Sector in the EU, supports Allianz's results, as it reports a drop in the overall figures of accidents and incidents in 2020.
The overall improvement shows the positive effects of an increased focus on safety measures such as regulation, improved ship design and technology and risk management advances. EMSA also indicated that the affect of the pandemic – shutting down sectors such as cruise – may have had an impact on the 2020 figures.
However, Allianz pointed out that the crew change crisis has continued to have a major impact on seafarer wellbeing. In March 2021, it was estimated that some 200,000 seafarers remained onboard vessels. Crewing issues have been in the spotlight in the wake of the Wakashio incident in July 2020. Allianz noted that extended periods at sea can lead to mental fatigue and poor decision making, which ultimately impact safety.
Regarding threats to the industry, Allianz indicated that supply chains are also at risk from environmental disruption, political conflicts and security threats. For example, the increase of piracy in the Singapore Straits and Gulf of Guinea have had a significant impact on the shipping industry with Allianz suggesting that former hotspots like Somalia could re-emerge due to the effects of the pandemic on social, political and economic problems in the region.
The report also noted safety concerns over larger vessels following the Ever Given incident. Larger vessels pose unique risks with higher salvage costs and the requirement for specialised salvage equipment, which is limited. The incident also cast light on maritime supply chains with the repercussions of the incident lasting for months.
Overall, the firm concluded that Covid-19 has had a lesser effect on the shipping industry than initially anticipated, with the cruise industry being the worst affected. However, the industry's three largest markets – tankers, bulkers and containers – have been quick to recover.