LP 01/2022 CPI Review of Shipping Safety Risks 2021

The Association has issued Review of Shipping Safety Risks 2021 in the language of Chinese for Members' reference.

The year of 2021 has been unusual for the international shipping industry with Covid continued to be a threat to human health and global economy. The industry may expect long-term scarring from the pandemic in the years to come. With considerations to the conditions of entered ships, the Association attempts to leverage potentially valuable information and map typical safety incidents to explore industry data applications and ship safety management through risk and compliance solutions.

I. AGCS Safety and Shipping Review

According to the AGCS report, there were 2,703 reported incidents for ships over 100 GT (data run on May 1, 2021) in 2020. The British Isles, North Sea, English Channel and Bay of Biscay maritime region saw the highest number of reported incidents (579, accounting for 21.4%). Machinery damage/failure was the top cause of shipping incidents, accounting for 40%. The 49 total losses represent a 45% decline compared to the rolling 10-year loss average (88). Shipping safety was significantly improved, reflecting the positive effect of an increased focus on safety measures such as regulation, improved ship design and technology, and risk management advances.

II. Analysis on incident numbers

According to Lloyd’s List Intelligence Casualty Statistics and analysis of the incidents, the industry has strived for higher safety standards to safeguard lives, properties and the environment over the last decade. With increased level of digitalisation and automation, optimisation of class rules, improved ship performance and better enforcement of regulations, the sector demonstrates an overall positive safety trend, yet seeing an apparent increase of machinery damage claims.

III.   Analysis on incident causes

Theories of system safety engineering show that shipping is a complicated and dynamic system that integrates personnel, ship and the environment, and a maritime safety incident further involves the social system of law-making, industry association and company management.

According to the Heinrich Law, what stands opposite to safety is not incident, but risk. Although most safety incidents are random events, observing the patterns and eliminate customary risk factors can help create safer practices.

IV. Analysis on emerging risks

1. With increase in the number of high value assets such as containers, oil and LNG tankers, passenger liners, vessels in general are faced with insured risks that are more and more specific.
2. It has been agreed that in recent years, upsizing of vessels, global warming and climate change, misdeclaration of dangerous goods, and scarce firefighting capabilities on board large container ships are primary sources of shipping risks.
3. With large liner companies expanding their business downstream the supply chain, the arctic shipping route getting normal, and bulk carriers being adapted to carry containers, the shipping industry as whole is faced with challenges brought by these novel patterns of operation.
4. Cyber-attacks will persist to be a dominant risk with further application of 5G technology and IoT in port and shipping context. The long-term impact of new regulations and new fuels on ships remain unclear.

V. Conclusions

Constant amendments of international conventions and regulations have helped drive the moderating trend for overall safety incidents, yet implementation of new regulations and use of new compliant fuels are likely to complicate machinery damage/failures. In addition, the pandemic continues to bring immense challenges while the industry explores effective risk management for decarbonization. Hopefully by looking back at typical cases the industry can draw experience to get prepared for emerging risk factors.

The Association has issued Review of Shipping Safety Risks 2021 in the language of Chinese, referring to data and information disclosed by Lloyd’s List Intelligence Casualty Statistics, Allianz Safety and Shipping review for the last ten years, incident investigation reports by flag states, DNV Maritime Safety Whitepaper 2021 and related news. To get a full edition of the report, please contact the loss prevention department.