Global Shipping Losses Hit All-time Low

However, vigilance is required because the speed and extent of the way the industry’s risk profile is changing is unprecedented in modern times.

Boat in Body of Water

Given that as much as 90% of international trade is transported across oceans, maritime safety is critical. Thirty years ago, the global shipping fleet lost around 200 large vessels a year. This total fell to a record low of 26 in 2023, a decline of more than one third year-on-year and by 70% over the past decade. However, the fact that shipping is increasingly subject to growing volatility and uncertainties from war and geopolitical events and the consequences of climate change, as well as risks resulting from the trend for larger vessels, means the sector will have its work cut out to maintain this status quo in future, according to marine insurer Allianz Commercial’s Safety and Shipping Review 2024.

The speed and extent of the way the industry’s risk profile is changing is unprecedented in modern times. Conflicts such as in Gaza and Ukraine are reshaping global shipping, affecting crew and vessel safety, supply chains and infrastructure, and even the environment. Piracy is on the rise, with a worrying re-emergence off the Horn of Africa. The disruption caused by drought in the Panama Canal shows how the changing climate is affecting shipping, all at a time when it is having to undertake its most significant challenge: decarbonization. 

Southeast Asia emerges as maritime region with highest total losses

During 2023, 26 total losses were reported globally compared with 41 a year earlier. There have been more than 700 total losses reported over the past decade (729). The South China, Indochina, Indonesia and the Philippines maritime region is the global loss hotspot, both over the past year and decade (184). It accounted for almost a third of vessels lost last year (eight). The East Mediterranean and Black Sea ranks second (six), with activity up year-on-year. Cargo ships accounted for over 60% of vessels lost globally in 2023. Foundered (sunk) was the main cause of all total losses, accounting for 50%. Extreme weather was reported as being a factor in at least eight vessel losses around the world in 2023, with the final total likely higher.

The number of shipping incidents reported globally declined slightly last year (2,951 compared with 3,036 in 2022), with the British Isles seeing the highest number (695). Fires onboard vessels – a perennial concern – also declined. However, there have still been 55 total losses in the past five years and over 200 fire incidents reported during 2023 alone (205). Fires remain a key safety issue on larger vessels given the potential threat to life, scale of the damage and the fact that associated costs can be severe, a factor contributing to the long-term increase in the cost of large marine insurance claims.

Consequences of geopolitical conflicts

Recent incidents, such as in the wake of the conflict in Gaza, have demonstrated the increasing vulnerability of global shipping to proxy wars, disputes and geopolitical events, with more than 100 ships targeted in the Red Sea alone by Houthi militants in response to the conflict. Disruption to shipping in and around the region has persisted and is likely to remain for the foreseeable future. The re-emergence of Somali pirates, following their first successful hijacking since 2017, is an additional cause for concern.

Both the war in Ukraine and the Red Sea attacks have also revealed the increasing threat to commercial shipping posed by new technology such as drones, which are relatively cheap and easy to make, and difficult to defend against without a large naval presence. Looking to the future, more technologically driven attacks against shipping and ports are also a distinct possibility. Reports of vessels experiencing GPS interference are increasing, particularly in the Strait of Hormuz, the Mediterranean and the Black Sea.

The report also notes that in the two-plus years since Russia invaded Ukraine the gradual tightening of international sanctions on Russian oil and gas exports has contributed to the growth of a sizable "shadow fleet" of tankers, somewhere between 600 and 1,400 vessels. These are mostly older, often poorly maintained vessels that operate outside international regulation, often without proper insurance. Vessels have been involved in at least 50 incidents to date, including fires, engine failures, collisions, loss of steerage and oil spills. 

See also: Emerging Risks for Shipping Industry

Rerouting brings risks and environmental challenges

Attacks against shipping in Middle East waters have also severely affected Suez Canal transits – down more than 40% at the beginning of 2024 – and trade. Coming so soon after the disruption caused by drought in the Panama Canal, this amounts to a double strike on shipping, causing yet more issues for global supply chains. Whichever alternative routes vessels take, they face lengthy diversions and increased costs, also affecting their customers. Avoiding the Suez Canal adds at least 3,000 nautical miles (over 5,500km) and 10 days sailing time, rerouting via the Cape of Good Hope.

Rerouting also affects the risk landscape and the environment. Storms and rough seas can be more challenging for smaller vessels used to sailing coastal waters, while infrastructure to support an incident involving the largest vessels, such as a suitable port of refuge or a sophisticated salvage operation, may not be available. Environmental gains may be lost as rerouted vessels increase speeds to cover longer distances. Red Sea diversions are already cited as being a primary contributor to a 14% surge in emissions in the EU shipping sector this year.

See also: The End of Globalization?

Green shipping challenges

Shipping contributes around 3% of global emissions caused by human activities, and the industry is committed to tough targets to cut these. Reaching these targets will require a mix of strategies, including measures to improve energy efficiency, the adoption of alternative fuels and innovative ship design and methods of propulsion. 

Decarbonization presents various challenges for an industry juggling new technologies alongside existing ways of working. For example, the industry will need to develop infrastructure to support vessels using alternative fuels, such as bunkering and maintenance, while at the same time phasing out fossil fuels. There are also potential safety issues with terminal operators and vessels’ crew handling alternative fuels that can be toxic or highly explosive.

Increasing shipyard capacity will also be key as the demand for green ships accelerates. Such capacity is currently constrained, with long waiting times and high building prices. Over 3,500 ships must be built or refitted annually until 2050, yet the number of shipyards more than halved between 2007 and 2022. Capacity constraints on shipyards could have a knock-on effect for repairs and maintenance, with damaged vessels or those with machinery issues potentially facing long delays. Machinery damage or failure is the most frequent cause of shipping incidents, accounting for over half of these globally in 2023 (1,587).

To read the full Allianz Commercial Safety and Shipping Review 2024, please visit: Commercial-Safety-Shipping-Review-2024.pdf (

Rahul Khanna

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Rahul Khanna

Capt. Rahul Khanna is global head of marine risk consulting at global insurer Allianz Commercial

A marine professional with 27 years of experience within the shipping and maritime industry, Capt. Khanna served more than 14 years on board merchant ships in all ranks, including master of large oil tankers trading worldwide.


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