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© Reinhard/AdobeStock of cargo. Bulk carriers and tankers are not designed to carry going supply/ demand pressures for shipping, which have re- containers. Crews may not be trained or experienced enough sulted in port congestion, higher freight fees and longer transit to handle containers or respond appropriately to an incident at times. Overall, port congestion globally is running above the sea. Carrying containers could also change the maneuvering levels seen last year, with speci? c container ? eet congestion characteristics of a vessel and affect how it behaves in bad trending towards previous highs, Clarksons Research noted in weather and strong winds. Converting a vessel or changing its March 2022, while the impacts of the invasion are likely to cre- use would likely be viewed as a material change in risk pro? le ate further inef? ciencies across the maritime transport system. and could be categorized by underwriters as a higher risk. Port risks are already increasing with larger ships, which With demand for shipping high, owners are also extend- concentrates large volumes of trade into the fewer larger ports ing the working life of vessels. Even before the pandemic, that have specialist infrastructure. Accumulations of cargo the average age of vessels in the global merchant ? eet was exposures at mega ports have been rising, while commercial rising – 21.75 years in 2021, or 14.7 years for vessels greater pressures increase the risks of mistakes and accidents. Ports than 2,000 gross tonnage (GT). This compares with around 19 are also increasingly reliant on technology, where an outage years a decade ago, and 13 years for vessels greater than 2,000 or cyber-attack could effectively close a port.

GT, according to the IUMI Stats Report 2021. Commercial pressures are already a contributing factor in

Analysis has shown older container and cargo vessels (aged many losses that resulted from poor decision-making. The between 15 and 25 years old) are more likely to result in a pressure on vessels and crew is currently very high. The re- claim. Newer ships need less maintenance and have the latest ality is that some may be tempted to ignore issues or take technology, which typically translates to a lower risk. Older shortcuts, which could result in future losses. AGCS analysis ships are more likely to suffer from corrosion, while systems shows that 75% of shipping incidents involve human error.

and machinery are more prone to failure and breakdown. The international shipping industry is vital to world trade, so vessel safety is critical. While the sector continued its

Port congestion, commercial long-term positive safety trend over the past year, emerg- ing risks and the lingering effects of the pandemic continue pressures heighten risk

Covid-19 measures in China, a surge in consumer demand to challenge the industry. The insurance industry remains a and the invasion of Ukraine have all been factors in ongoing steadfast partner helping the industry navigate these unprec- unprecedented port congestion. edented times.

Congestion at the US ports of Los Angeles and Long Beach reached record levels in November 2021, with 116 container

The Author ships either in port or at anchor, while in March 2022, Los

Khanna

Angeles recorded its third-busiest month as work continued

Captain Rahul Khanna is Global Head of to clear marine terminals of cargo and reduce the number of

Marine Risk Consulting at Allianz Global ships waiting at sea.

Corporate & Specialty. He served more than

At the same time, repeated outbreaks in China, resulting in 14 years on board merchant ships in all ranks, the staggered lockdown of Shanghai in March/April 2022 for including Master of large oil tankers.

example, and Russia’s invasion of Ukraine is compounding on- www.marinelink.com 27

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