Top 10 Safety Trends in the Shipping Industry
Navigating a sea of challenges from rising costs to cybersecurity, this article explores the top 10 safety trends shaping the shipping industry in 2023.
Navigating a sea of challenges from rising costs to cybersecurity, this article explores the top 10 safety trends shaping the shipping industry in 2023.
The shipping industry is in the midst of an era marked by rapid technological advancements and evolving regulations. While these changes bring about many opportunities for efficiency and sustainability, they also introduce a multitude of safety challenges.
Whether you're an insurer, ship owner, operator, or regulator, understanding the safety landscape is crucial. This article expands on the 2023 Safety Review provided by Allianz Global Corporate & Specialty (AGCS) and outlines the top 10 trends currently affecting safety in the maritime industry.
Soaring commodity and labor costs present both a financial and safety dilemma for the shipping industry.
A typical machinery damage claim's price has doubled since before the pandemic, according to AGCS. Alongside an 18% inflation-driven spike in ship repair costs from 2020 to 2022, this financial pressure pushes ships to operate beyond safe parameters. Consequently, risks of mechanical and structural failures are elevated. Delayed maintenance due to labor shortages and costly materials further undermines vessel safety, setting off a dangerous cycle.
Beyond causing logistical problems, supply chain hiccups ripple through various aspects of shipping, from timely deliveries to safety protocols. These disruptions result in prolonged repair times and increased yard costs. Moreover, crowded ports compel crews to work beyond their stipulated hours, exacerbating fatigue-related errors—a critical safety concern highlighted by the Baltic and International Maritime Council (BIMCO).
More than 3,100 containers were lost on average annually during 2020 and 2021 – four times the total reported in the previous period – and incidents have continued. This increase is driven by factors such as larger ships, extreme weather and mis‐declared cargo weights (leading to container stack collapse).
The Baltic and International Maritime Council (BIMCO) estimates that over 65% of fleet growth in the next two years will involve ships larger than 15,000 TEU. Although these mega-ships are cost-effective and eco-friendlier on a per-container basis, they bring with them unique challenges, such as limited port accessibility, increased fire risks, and more severe consequences in grounding incidents.The large size and weight of these vessels also magnify the consequences of any accidents. Fire is already one of the biggest causes of general average claims on container vessels. With these mega-ships often carrying upwards of 20,000 containers, the risks of a catastrophic fire are significantly higher.
AGCS analysis of close to 250,000 marine insurance industry claims shows that fire is the most expensive cause, accounting for 18% of the value of all analyzed.
The rise of electric vehicles and the increasing reliance on lithium-ion batteries for various applications are altering the landscape of global shipping. The proliferation of such hazardous cargo is substantially increasing fire risks, particularly on larger vessels that amplify the consequences of fires.
Recent incidents, like the ZIM Charleston fire and the sinking of the TSS Pearl, serve as cautionary tales. These incidents resulted in considerable loss and demonstrated the difficulties in managing hazardous cargo fires at sea. Such disasters are increasingly frequent, with AGCS reporting that 64 ships were lost to fires in the past five years alone.Safety protocols have to evolve rapidly to mitigate these heightened risks. Traditional firefighting measures are proving inadequate for the types of fires initiated by modern, volatile cargo.
Companies must invest in cutting-edge fire suppression technologies designed to deal with lithium-ion battery fires and provide rigorous training programs for their crew members. Accurate documentation and stringent safety protocols for hazardous cargo can no longer be optional; they are a must.
The nature and scope of risks are transforming, requiring the insurance sector to adapt quickly. The trend towards larger ships, for example, leads to higher container cargo accumulation and exposure, contributing to more substantial claims. Decarbonization, hazardous cargo, and new regulations are reshaping the risk portfolio, causing some insurers to rethink their exposure to the industry.
Decarbonization is an admirable and necessary goal, but it introduces new types of risks. For example, newer types of fuels and energy storage systems may be chemically unstable, posing the risk of spills, explosions, or fires. Companies must invest in research and training to safely handle these new technologies.
Predictive analytics and Artificial Intelligence (AI) are becoming key tools in proactive risk management. These technologies can analyze vast amounts of data to forecast potential hazards, allowing for preventive action. The first step is to collect structured and reliable inspection data.
The increased use of digital technologies and AI onboard ships also brings with it the risk of cyber-attacks. These attacks could disable essential navigation or safety systems, leading to severe consequences. Comprehensive cybersecurity measures are no longer optional; they are a safety imperative.
Regulations are becoming more stringent, focusing on everything from emission levels to worker safety. Amendments to pivotal guidelines like SOLAS (Safety of Life at Sea) and MARPOL (International Convention for the Prevention of Pollution from Ships) expected to take effect within the next 3 to 5 years. Non-compliance can lead to hefty fines and legal troubles, making it essential for companies to stay ahead of regulatory changes and implement them proactively.
On the other hand, the toll this takes on the crew can't be understated. From increased workload to heightened stress levels, the crew finds themselves navigating a labyrinth of rules. This dilution of focus can lead to impaired decision-making and reduced time for essential operational tasks.
Human error continue to be a significant factor in shipping incidents. A simple mistake on a large vessel can result in a multi-million dollar claim. Effective training that not only focuses on technical skills but also on stress management and decision-making under pressure can mitigate these risks. To be truly effective, however, this training must be ongoing, adapting to new challenges such as those introduced by the increasing regulatory environment.
The shipping industry is navigating a sea of transformational changes—ranging from economic pressures like inflation and supply chain disruptions to technological and environmental shifts like decarbonization and increased cybersecurity risks. The Safety Review 2023 by Allianz Global Corporate & Specialty (AGCS) brings attention to the elevated severity of claims, suggesting that traditional risk management strategies alone can no longer insulate companies from the diverse set of challenges they face today.
In this complex landscape, the importance of adopting a multi-faceted approach to safety and efficiency is paramount. Incorporating platforms like Kaiko Systems directly tackles various emerging safety challenges. Through the digitization of onboard tasks and enhancing ship-to-shore communication, Kaiko Systems effectively minimizes human error and lightens the crew's workload. This enables more precise adherence to industry standards and focuses on essential operational activities. Additionally, shore teams can remotely access real-time findings, vessel health conditions, and the status of onboard work, facilitating compliance with ever-changing regulations and minimizing off-hire risks. In doing so, Kaiko Systems plays a pivotal role in fostering a maritime ecosystem that is not just more resilient and efficient, but also safer.
