Global shipping losses at a record low; South China Sea a hotspot: report

TOTAL losses in global commercial shipping hit a record low in 2022, with a quarter of those losses happening in the South China Sea, according to an annual safety and shipping review published by industrial insurance provider Allianz Global Corporate & Specialty (AGCS).

Globally, 38 ships were lost last year, 35.6 per cent fewer than the 59 vessels lost in 2021. This is the lowest level of loss in 12 years, since the annual review was first published. The figure also represents a 65 per cent reduction from a decade ago: in 2013, 69 vessels were lost.

Captain Rahul Khanna, the global head of marine risk consulting at AGCS, said: “Shipping losses have sunk to the lowest number we’ve seen in the history of our annual study, reflecting the positive impact that safety programmes, training, changes in ship design and regulation have had over time.”

Ten out of the 38 reported total losses, or 26 per cent, occurred in the “global hotspot” region of South China, Indochina, Indonesia and the Philippines. This is the result of “high levels of local and international trade, congested ports, older fleets and extreme weather”, said the report.

The Arabian Gulf, British Isles and the West Mediterranean were tied as the region with the next highest number of total losses: three vessels were lost in each of these areas.

The most common types of ships to suffer total loss were cargo vessels (10 lost), fishing vessels (six) and passenger vessels (five).  The most common reasons for total vessel loss were foundering or sinking (20), fire or explosion (eight), and ship-to-ship collisions (four). 

The report noted that piracy was at its lowest level in almost three decades. There were 115 incidents in 2022, down from 132 the year before, thanks largely in part to international maritime law enforcement in the piracy hotspot of the Gulf of Guinea.

Beyond the Gulf of Guinea, however, the South China Sea still counts as a piracy hotspot. A third, or 38, of the 115 incidents, took place in the Singapore Strait alone; in February 2023, eight incidents of robbery against ships were reported there and in the Strait of Malacca. 

Despite the general improvements in safety and reduction in shipping losses, the report cited the significant challenges that remain.

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The number of shipping casualties or incidents remained steady at 3,032 in 2022, from 3,000 in 2021. The number of fires hit a record in a decade – 209. The surge in demand for lithium-ion batteries and the problem of mis-declared cargo are two interlinked issues that have contributed to fires aboard commercial vessels.

The report analysed shipping for the 2022 calendar year, having drawn on Lloyd’s List Intelligence Casualty Statistics for its primary source of data on losses and casualties. Total losses are defined by the report as total losses recorded for vessels larger than 100 gross tons.