A warning that economic pressures are leading some shipowners to stretch maintenance to the longest possible intervals has been issued by the big Allianz insurance group.
It is critical that the financial state of the industry does not result in a "put it off until later" mentality developing, Allianz declares in its annual review of shipping safety.
Allianz, the world's largest insurance group, also cautions that laid-up vessels returning to trade could pose problems for the future.
"There is a need for standardised lay-up procedures. Without these, the reactivation of such vessels may result in a painful exercise for the industry," Allianz notes in the 2016 edition of its Safety and Shipping Review.
The review says the number of ship total losses declining slightly to 85 in 2015, the lowest number for a decade and the second year in a row of losses below 100. The ten year average is 123 total losses.
Allianz says a total of 2,687 casualties were reported in 2015, representing a 4% year on year improvement.
Large shipping losses have declined by 45% over the past decade, driven by an increasingly robust safety environment and self regulation, according to the Allianz report.
"While the long-term downward trend in shipping losses is encouraging, the continuing weak economic and market conditions, depressed commodity prices and an excess of ships are pressurizing costs, raising safety concerns. Allianz Global Corporate & Specialty has seen an increase in the frequency of losses over the past year which can likely be attributed to some extent to this environment.” noted marine claims chief, Duncan Southcott.
“The economic downturn and its impact on the shipping sectoris likely to have a negative impact on safety,” added Capt Rahul Khanna, global head of marine risk consulting. “Many sectors, such as general cargo, bulk and offshore, are already challenged and any drop in safety standards will be a serious case for concern.”
More than a quarter of all total losses in 2015 occurred in the South China, Indochina, Indonesia and Philippines region, which has been the top loss hotspot for the past decade. Losses are up year on year and are double those of the next area, the East Mediterranean and Black Sea.
There were 36 cargoship total losses, an increase for the first time in three years, according to Allianz.
The 72,000-dwt bulk carrier Los Llanitos (built 1993) was the largest ship to become a total loss in 2015, following by the 69,300-dwt Panamax Trader (built 1990), the 31,515-gt, ro-ro El Faro (built 1975) and 172,000-dwt Cape Jupiter (built 1997).
Foundering is the most common cause of loss accounting for half the ten largest vessels lost with bad weather a recurrent factor.
"More extreme weather conditions have been predicted. Weather routing will continue to be a critical component to the safe navigation of vessels," notes Allianz.
Other concerns covered in the Allianz review include an increase in people driven claims with fatigue a factor when crew numbers are often at the lowest possible level.
There is also passenger ship safety particularly on non-international voyages with Allianz pointing to recent ferry casualties in South East Asia.
The challenge of salving a mega-containership is an issue with Allianz warning of the need to prepare for a $1bn plus casualty.
The threat posed by more extreme weather conditions including the risk of superstorm ship sinkings is also highlighted.
Further concerns include increased machinery claims from use of ultra low sulphur bunkers, more Arctic casualties as far north voyages increase, the cyber threat and the continuing pirate menace.
Allianz's Safety and Shipping Review is the latest in a series that began in 2012 to mark the centenary of the Titanic tragedy.
Despite Allianz's standing in the insurance industry including a big marine account, the statistics are not based on its own or other insurance industry sources but is a third party compilation based on casualties reported on the internet or from other published sources.
