- Allianz Safety and Shipping Review 2025: Trade conflict between the US and China and growing shadow fleet add to substantial challenges for the shipping industry.
- Despite geopolitical headwinds: only 27 large ships lost worldwide in 2024, down by more than 20%, the industry’s lowest-ever total.
- Progress made on traditional risks such as fires, collisions, and groundings, which are the main causes of losses, but potential for large claims remains a concern.
SINGAPORE – Media OutReach Newswire – 27 May 2025 – The fast-changing geopolitical landscape is creating new risks and challenges for a shipping industry already juggling the energy transition and the legacy of the Covid-19 pandemic, according to Allianz Commercial’s Safety and Shipping Review. The industry faces an increasingly volatile and complex operating environment, marked by attacks against shipping, vessel detentions, sanctions, as well as the fall-out from incidents involving damage to critical sub-sea cables. Furthermore, the ripple effect of increasing protectionism and tariffs threatens to remake supply chains and shake up established trade relations.
Given 90% of international trade is transported across oceans, those developments are concerning, especially as the industry continues to see the potential for large claims from traditional risks such as fires, collisions and groundings, which are still the main drivers for total losses of large vessels. However, there is also good news. The shipping industry has made significant improvements when it comes to maritime safety in recent years. During the 1990s the global fleet was losing 200+ vessels a year. This total had halved 10 years ago and is now down to a record low of 27 as of the end of 2024 (from 35 in 2023).
“The relevance of political risk and conflict as a potential cause of maritime loss is increasing with heightened geopolitical tensions. Total losses from traditional causes may have reduced over time, but we could be in a position where this positive trend is potentially offset by war and other political-related exposures. As an industry, we are in a better position with regards to traditional risks, but there is a renewed focus on geopolitical risks,” says Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Commercial.
US-China
trade
conflict
and
growing
shadow
fleet
bring
uncertainty
and
challenges
China
has
been
the
biggest
target
of
the
protectionist
measures
of
the
US
administration
with
tariffs
reaching
145%,
before
both
countries
agreed
to
reduce
them
for
90
days.
Developments
have
significantly
impacted
global
maritime
trade
with
approximately
18%
of
it
subject
to
tariffs
as
of
mid-April
2025,
compared
with
4%
in
early
March,
and
dramatic
declines
in
shipments
reported
in
the
immediate
aftermath
of
the
“Liberation
Day”
announcements.
While
the
future
of
US
trade-focused
policies
remains
uncertain,
another
phenomenon
is
posing
an
increasing
challenge
for
the
maritime
and
insurance
industries:
the
shadow
fleet.
Since
the
start
of
the
war
in
Ukraine,
the
size
of
the
shadow
fleet
has
grown
significantly.
Today,
around
“Although recent sanctions are making it harder for these vessels to trade, the shadow fleet continues to pose a serious risk to maritime safety and the environment, as many are likely to be older vessels that are poorly maintained and inadequately insured. In case of an oil spill involving a shadow fleet tanker, cleanup costs could be as much as US$1.6bn,” says Justus Heinrich, Global Product Leader, Marine Hull, Allianz Commercial.
Red
Sea
rerouting:
older
vessels
and
riskier
routes
in
addition
to
higher
costs
With
ongoing
geopolitical
volatility
in
the
Middle
East,
many
ship
operators
have
rerouted
vessels
around
the
Cape
of
Good
Hope,
adding
time
and
cost
to
transits
between
Asia
and
Europe.
For
example,
this
rerouting
adds
around
$1mn
in
costs
and
at
least
10
days
to
a
typical
transit
between
China
and
Europe.
According
to
estimates,
cargo
volumes
in
the
strait
had
fallen
by
two-thirds
by
September
2024,
with
rerouting
costing
the
global
economy
some
US$200bn
that
year.
The
quality
and
safety
of
vessels
may
also
be
impacted
as
a
result
of
this
rerouting.
“With container capacity under pressure, some shipowners have gone out to the market to meet supply, purchasing tonnage that is often older and second best. This has helped push up values and seen vessels scheduled for scrap and older tonnage stay in the market longer. The concern is that when called back into service, these vessels may not be in the best state to operate safely on longer sea routes and in rough weather,” says Captain Nitin Chopra, Senior Marine Risk Consultant, Allianz Commercial Asia.
Fires
and
mis-declared
cargo
remain
a
top
concern
for
large
vessels
Large
vessel
fires
are
still
a
major
concern
for
hull
and
cargo
insurers.
There
were
seven
total
losses
reported
across
all
vessel
types
during
2024,
the
same
number
as
a
year
earlier.
The
number
of
incidents
overall
was
up
year-on-year
to
a
decade
high
of
250,
again
across
all
vessel
types.
Around
30%
of
these
fire
incidents
occurred
on
either
container,
cargo
or
roll-on
roll-off
vessels
(ro-ros)
(69).
More
than
100
total
losses
of
vessels
have
been
caused
by
fires
in
the
past
decade.
Efforts
to
mitigate
these
risks
are
underway,
with
regulatory
changes
and
technological
advancements
aimed
at
addressing
mis-declared
cargo,
a
primary
contributor
to
such
fires.
This
is
critical
as
the
electrification
of
the
global
economy
poses
further
challenges
given
the
growing
number
of
lithium-ion
batteries
and
battery
energy
storage
systems
being
transported.
“There
is
little
doubt
the
shipping
industry
is
becoming
more
resilient
against
the
risks
associated
with
large
vessels,
although
we
can
by
no
means
say
they
are
under
control.
However,
only
27
total
losses
during
2024
underlines
the
positive
trend.
To
put
this
into
perspective:
there
are
over
100,000
ships
(100GT+)
in
the
global
fleet.
However,
uncertainty
and
multiple
risks
persist.
Cyber-attacks
and
GPS
interferences
are
increasing.
Ceasefires
have
raised
hopes,
but
the
Red
Sea
security
threat
and
supply
chain
disruption
will
likely
remain.
Meanwhile,
the
green
transition
requires
much
work.
The
coming
years
will
be
decisive
and
will
determine
the
path
of
the
sector
and
global
trade,”
explains
Captain
Rahul
Khanna,
Global
Head
of
Marine
Risk
Consulting,
Allianz
Commercial.
https://commercial.allianz.com/
https://www.linkedin.com/company/allianz-commercial/
Hashtag: #shipping #allianzcommercial
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