Maritime Risks on the Rise Despite Record Low in Lost Ships

In 2023, the number of completely lost large shipping vessels reached a record low of just 26, as reported by Allianz Commercial. This marks a significant decline, with a 33% reduction in lost ships year-on-year and a 70% decrease over the past decade. Allianz classifies a large vessel as a ship exceeding 100 gross tons.

Decrease in Overall Shipping Incidents

Overall shipping casualties or incidents decreased by approximately 3% in 2023, with machinery damage or failure constituting more than half of all global events.

Breakdown of Ship Losses by Type

Cargo ships represented the majority of total losses, comprising 60% of the ships lost in 2023. Fishing vessels followed, with four total losses, and tug boats accounted for three losses. Sinkings were the leading cause of ship losses, making up half of the total, followed by wrecked/stranded vessels and fires/explosions.

Challenges in the Global Shipping Industry

Despite the decrease in lost ships, the global shipping industry faced significant challenges in 2023. Rising piracy, droughts affecting the Panama Canal, and ongoing conflicts in Ukraine and Gaza endangered shipping vessels and their crews.

Captain Rahul Khanna, global head of marine risk consulting for Allianz Commercial, highlighted the impact of climate change on shipping, emphasizing the disruption caused by the Panama Canal drought and the urgent need for the industry to decarbonize. These conditions necessitate the development of alternative shipping routes, which can lead to longer transit times and increased shipping costs.

Impact on Supply Chains

Businesses importing from China and Southeast Asia are experiencing delays as cargo vessels reroute around the Cape of Good Hope to avoid conflict in the Red Sea. As of April 2024, shipping volume around the Cape of Good Hope has surged by 193%.

Khanna noted in Allianz’s Safety and Shipping Review 2024 that recent disruptions, including extreme weather, climate incidents, container ship fires, groundings, the pandemic, and geopolitical conflicts, have severely tested the resilience of global supply chains. These events have exposed vulnerabilities and highlighted the need for robust strategies to mitigate such disruptions.

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Risk Management

Mitigating Financial Losses During Hurricane Season: A Skyscraper Insurance Guide

As hurricane season approaches, businesses must take proactive steps to safeguard against financial losses. At Skyscraper Insurance, we understand the unique challenges companies face in times of disaster, and we’re committed to helping our clients navigate them successfully. Here’s how your business can mitigate financial risks with the right strategies and support. 1. Diversifying Income Streams for Resilience A diversified revenue model is crucial to withstanding the disruptions caused by hurricanes. Skyscraper Insurance works with businesses to evaluate new opportunities—whether it’s launching an online platform, expanding services, or entering new markets. This ensures that if one revenue stream is impacted, others can sustain the business. 2. Comprehensive Insurance Coverage The first line of defense is making sure your insurance policies are up to date and cover potential hurricane-related damages. Skyscraper Insurance specializes in providing tailored insurance solutions, including business interruption coverage, property damage, and flood insurance, to protect our clients against catastrophic financial losses. 3. Creating a Contingency Plan with Experts In partnership with Skyscraper Insurance, businesses can develop disaster contingency plans that ensure operations continue smoothly, even in the face of supply chain delays or power outages. We help you establish backup solutions, such as alternate suppliers or inventory management systems, minimizing financial fallout. 4. Maintaining a Recovery Fund Skyscraper Insurance advises its clients to maintain a recovery fund, ensuring fast access to resources for repairs, inventory restocking, and other unforeseen costs. This proactive approach enables businesses to get back on their feet quickly without waiting for loans or insurance claims to process. 5. Leveraging Government Aid and Local Resources In the aftermath of a hurricane, government aid can be crucial for businesses. We assist our clients in navigating grants, low-interest loans, and tax breaks available through local and federal disaster relief programs, ensuring that financial recovery is swift. 6. Risk Management Strategies At Skyscraper Insurance, we provide businesses with customized risk management strategies designed to reduce vulnerabilities and protect financial stability. From evaluating potential hazards to implementing risk-transfer solutions, we help you mitigate loss before a disaster strikes. 7. Ensuring Proper Documentation for Claims Keeping detailed financial records is essential for filing accurate and timely insurance claims. We help clients organize and maintain critical documents that streamline the claims process, ensuring a quicker recovery period. Skyscraper Insurance: Your Partner in Resilience While hurricanes can be unpredictable, your business doesn’t have to face them alone. At Skyscraper Insurance, our commitment goes beyond coverage; we provide expert guidance and comprehensive risk management services that empower businesses to stay strong and resilient during hurricane season.

Safety Tips

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Maritime Risks on the Rise Despite Record Low in Lost Ships