Southeast Asia identified as most hazardous area for shipping: summary

What we know

• Nearly a third of the vessels lost at sea last year were in the vicinity of the Philippines and other parts of Asia, where high volumes of shipments transit, according to global underwriter Allianz Global Corporate & Specialty (AGCS).
• In 2023, 26 vessels were lost worldwide, down from 41 in 2022. This marks a significant improvement compared to the past decade when annual shipment losses reached as high as 105 vessels.
• The AGCS Safety and Shipping Review 2024 reported that most of the shipment losses last year occurred in the Philippines, South China, Indochina, and Indonesia. Most of these losses involved cargo vessels, totalling 16, followed by four fishing vessels and three tugboats.
• The primary cause of shipment loss last year was vessels sinking. Other causes included vessels being wrecked and stranded, as well as incidents involving fire, explosions, and collisions.
• The report also highlighted the challenging cross-border vessel transfers due to geopolitical tensions involving Russia, Ukraine, and the Red Sea region.
• Additionally, the Houthis have initiated assaults on the Red Sea as a demonstration of solidarity with the Palestinians during the current conflict between Israel and Hamas. Consequently, shipping companies have been compelled to divert their ships around the Cape of Good Hope in South Africa instead of passing through the Suez Canal in Egypt, resulting in extended delivery times and increased operational costs.

What they said

Senior marine risk consultant at Allianz Commercial Asia, Nitin Chopra, supported the Russia-Ukraine unrest argument, saying "Unstable regimes, regional disputes, and rivalries make for a dynamic situation around some of the world’s busiest shipping routes. The Red Sea crisis shows just how important critical waterways like the Suez Canal are to the world economy, and how vulnerable they can be to disruption.” Chopra added "Both routes are critical for the transport of manufactured goods and energy between Asia, Europe, and the US East Coast. Whichever route vessels take, they face lengthy diversions and increased costs. And let’s not forget, before these situations, the war in Ukraine had already prompted many shipping companies and cargo interests to seek alternative routes."