Page 13: of Maritime Reporter Magazine (February 2024)

motion, strikes, riots, and looting, is a new top ? ve risk for the marine and shipping industry this year at 23%.

Businesses and their supply chains face considerable geo- political risks with war in Ukraine, con? ict in the Middle East, and ongoing tensions around the world. Political risk in 2023 was at a ? ve-year high, with some 100 countries considered at high or extreme risk of civil unrest.

Clearly shipping companies are facing something of a per- fect storm in 2024 with the Red Sea attacks, potential escala- tion of tensions between the US and China in the South China

Sea (which could impact trade routes further) and even some signs of piracy returning around Somalia.

Business Interruption

Rounding out the top ? ve risks for marine and shipping companies is Business Interruption at 21% falling one spot from the 2023 rankings.

While companies may be con? dent that the worst of two key disruptors of recent times, the pandemic and the energy crisis, are behind them. Business disruption remains a key concern as ? rms are challenged to build resilience and diver- sify supply chains in a rapidly changing world. The shipping industry experienced this in the last months of 2023 when a severe drought restricted transits through the Panama ship- ping canal causing congestion and delays of up to two weeks.

The recent disruption in the Red Sea – a vital trade route between Europe and Asia – due to Houthi rebel attacks on vessels is the latest risk to hit shipping companies and supply chains. More than 400 container ships were diverted via the

Cape of Good Hope around the southern tip of Africa between mid-December 2023 and the beginning of January 2024, as a result of the attacks, prolonging journeys and causing delays to the delivery of products.

The maritime industry is critical to the global economy with shipping transporting between 80% to 90% of world trade.

While risks continue to evolve, signi? cant improvements have been achieved. Thirty years ago, the global ? eet was losing more than 200 vessels a year. At the end of 2022, fewer than 40 losses were reported. It has now been six years since a tri- ple-digit total loss year. Commercial insurers continue to work closely with their shipping clients to identify and mitigate risks to protect the long-term health and safety of the industry.

The Author

Soja

Rich Soja is North American Head of

Marine and Global Head of Inland Marine for global commercial insurer Allianz

Commercial based in New York.

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