Allianz Safety and Shipping Review 2025 - Shipping losses and safety

(www.MaritimeCyprus.com) The fast-changing geopolitical landscape is creating new risks and challenges for a shipping industry already juggling the energy transition and the legacy of the Covid-19 pandemic, according to Allianz Commercial’s Safety and Shipping Review. The industry faces an increasingly volatile and complex operating environment, marked by attacks against shipping, vessel detentions, sanctions, as well as the fall-out from incidents involving damage to critical sub-sea cables. Furthermore, the ripple effect of increasing protectionism and tariffs threatens to remake supply chains and shake up established trade relations. 

Given that 90% of international trade is transported across oceans, maritime safety is critical, and the shipping industry has made significant improvements in recent years. During the 1990s, the global fleet lost 200+ vessels a year. This total had halved by 10 years ago and is now down to a record low of 27 as of the end of 2024.

This compares with 35 a year earlier (vessels over 100 gross tonnage [GT]), down by around 20%, with a 75% decline in total losses over the past decade (105 in 2015). The South China, Indochina, Indonesia and the Philippines region is the main loss hotspot globally over the past year, together with the British Isles and the East Mediterranean and Black Sea (4 total losses each), and the past decade (169). A huge volume of imports and exports flow through the region, resulting in high levels of shipping traffic, which is reflected in the number of incidents. Overall, the past decade has seen 681 total losses reported across the shipping world.

Fishing vessels accounted for close to 40% of lost vessels during 2024 (10), followed by cargo (6) and chemical/product (3). Foundered (sunk) was the main cause of total loss across all vessel types (12), accounting for close to 50%. Fire/explosion ranked second (7), remaining stable with fishing vessels the main casualties. More than 100 total losses of vessels have been caused by fires in the past decade.

The number of reported shipping casualties or incidents around the world increased by around 10% during 2024 (3,310 compared to 2,963). The British Isles saw the highest number (799), followed by the East Mediterranean and Black Sea (694). The British Isles is also the top location for the most incidents over the past decade (5,613), accounting for 20% of 28,331 reported incidents. Machinery damage/failure accounted for well over half of all shipping incidents globally (1,860) in 2024, followed by vessel collision (251) and fire/explosion. There were 250 fire incidents during 2024, up by 20% year-on-year, the highest total for a decade.

The average age of a vessel involved in a total loss over the past 10 years is 29. Extreme weather was reported as being a factor in at least 7 losses during 2024.

Despite the ongoing trend for fewer large losses, challenges remain. Shipowners are trying to operate vessels safely within an ever-changing and dynamic regulatory framework and do the right thing, but this is becoming more difficult, given they have to manage a host of complex issues from conflicts, sanctions and tariffs, to the risks posed by the shadow fleet, to the emerging challenges that decarbonization brings. The relevance of political risk and conflict as a potential cause of maritime loss is increasing with heightened geopolitical tensions.

Partial and attritional losses remain a major concern and although the industry has made progress on the risks associated with large vessels, this does not mean they are all under control. Fires, collisions and groundings continue to occur due to a lack of mitigation and understanding of risk. Loss prevention and risk mitigation practices and processes must filter down to the grass roots. Ensuring safety will continue to require a significant effort across the industry.

US-China trade conflict and growing shadow fleet bring uncertainty and challenges

China has been the biggest target of the protectionist measures of the US administration with tariffs reaching 145%, before both countries agreed to reduce them for 90 days. Developments have significantly impacted global maritime trade with approximately 18% of it subject to tariffs as of mid-April 2025, compared with 4% in early March, and dramatic declines in shipments reported in the immediate aftermath of the “Liberation Day” announcements. While the future of US trade-focused policies remains uncertain, another phenomenon is posing an increasing challenge for the maritime and insurance industry: the shadow fleet. Since the start of the war in Ukraine, the size of the shadow fleet has grown significantly. Today, around 17% of the world tanker fleet is thought to belong to the shadow fleet: estimates indicate there are close to 600 tankers trading Russian oil alone. Shadow fleet vessels have been involved in tens of incidents around the world including fires, collisions and oil spills.

“Although recent sanctions are making it harder for these vessels to trade, the shadow fleet continues to pose a serious risk to maritime safety and the environment, as many are likely to be older vessels that are poorly maintained and inadequately insured. In case of an oil spill involving a shadow fleet tanker, cleanup costs could be as much as US$1.6bn, most likely to be paid by taxpayers," says Justus Heinrich, Global Product Leader, Marine Hull, Allianz Commercial.

Fires and mis-declared cargo remain a top concern for large vessels

Large vessel fires are still a major concern for hull and cargo insurers. There were seven total losses reported across all vessel types during 2024, the same number as a year earlier. The number of incidents overall was up year-on-year to a decade high of 250, again across all vessel types. Around 30% of these fire incidents occurred on either container, cargo or roll-on roll-off vessels (ro-ros) (69).

More than 100 total losses of vessels have been caused by fires in the past decade. Efforts to mitigate these risks are underway, with regulatory changes and technological advancements aimed at addressing mis-declared cargo, a primary contributor to such fires. This is critical as the electrification of the global economy poses further challenges given the growing number of lithium-ion batteries and battery energy storage systems being transported.

“There is little doubt the shipping industry is becoming more resilient against the risks associated with large vessels, although we can by no means say they are under control. However, only 27 total losses during 2024 underlines the positive trend. To put this into perspective: there are over 100,000 ships (100GT+) in the global fleet. However, uncertainty and multiple risks persist. Cyber-attacks and GPS interferences are increasing. Ceasefires have raised hopes, but the Red Sea security threat and supply chain disruption will likely remain. Meanwhile, the green transition requires much work. The coming years will be decisive and will determine the path of the sector and global trade,” explains Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz

Source: Allianz Insurance