Piracy at lowest level in three decades helps reduce annual ship loss rate

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Maritime piracy is at its lowest level in nearly three decades, with the improved situation in the Gulf of Guinea contributing to the downward trend. This has partly accounted for the reduction in the number of ships lost to all causes in 2022.

Insurance giant Allianz said that progress has been made in the fight against piracy, with 115 incidents during 2022. Ten years ago, there were 138 incidences of piracy in the first six months of 2013 alone. The overall reduction in activity in the Gulf of Guinea – down from 35 incidents in 2021 to 19 in 2022 – is a significant contributor. In 2019, the region accounted for 90% of global kidnappings reported at sea.

“However, sustained efforts are needed to ensure the continued safety of seafarers in the Gulf of Guinea region. Piracy is tied to underlying social, political and economic problems, which could deteriorate further. The region remains dangerous,” said Captain Rahul Khanna, Global Head of Marine Risk Consulting at Allianz Global Corporate & Specialty (AGCS).

Two incidents of piracy were reported in the last quarter of 2022, and in March 2023 pirates boarded a product tanker off the coast of the Democratic Republic of the Congo, while in April another tanker was boarded about 300 nautical miles southwest of Abidjan, Ivory Coast – all crew were later reported safe with the oil cargo the target. Seafarers are encouraged to follow industry best management practice recommendations in these waters, Allianz said.

The Allianz Safety & Shipping Review 2023 found that shipping losses hit a record low in 2022, driven in part by the reduction in piracy, but there was a jump in fires, while the shadow tanker fleet and economic uncertainty pose new safety challenges.

Allianz noted that 38 large ships lost worldwide in 2022 – down by more than a third and the lowest total in the report’s history. Fire is the second top cause of loss over the past year with eight vessels lost and more than 200 incidents reported – the highest for a decade. Transport of electric vehicles and battery-powered goods bring new fire risks. Larger vessels and mis-declaration of cargo amplify the consequences of fires.

Every year AGCS analyses reported shipping losses and casualties (incidents) involving ships over 100 gross tons. During 2022, 38 total losses of vessels were reported globally, compared with 59 a year earlier. This represents a 65% decline in annual losses over 10 years (109 in 2013). Thirty years ago, the global fleet was losing 200+ vessels a year.

According to the report, there have been more than 800 total losses over the past decade (807). South China, Indochina, Indonesia, and the Philippines maritime region is the global loss hotspot, both over the past year and decade (204 total losses). It accounted for one-in-five losses in 2022 (10) driven by factors including high levels of trade, congested ports, older fleets and extreme weather. The Arabian Gulf, British Isles and West Mediterranean waters were the second top loss locations (3). Around a quarter of vessels lost in 2022 were cargo (10). Foundered (sunk/submerged) was the main cause of total loss across all vessel types (20), accounting for over 50%. Fire/explosion ranked as the second top cause of loss (8) and vessel collision third (4).