Foundering is a top cause of loss in the maritime industry in South China, Indochina, Indonesia, and Philippines region, according to the Corporate & Specialty Safety and Shipping Review 2017 published this week by insurance company Allianz Global.
According to the review, 23 ships were lost from January 1, 2016 to December 31, 2016 in the region, among the 85 recorded losses globally.
241 casualties were also reported from the region, largely due to machinery damage or engine failure, which caused over half of these incidents, according to the review.
“More than a quarter of losses occurred in the South China, Indonesia, and Philippines region. Over half of these incidents involved cargo vessels. Foundered was the top cause, accounting for 87 percent of losses in this region,” the review said.
From January 1, 2007 to December 31, 2016, the region has been the top loss hotspot for a decade, with a loss of 249 out of the 1,186 total losses recorded globally.
Meanwhile, according to the review, safety remains a problem in the Philippines and Indonesia caused by poor maintenance and poor regulations, aside from the fact that Asia is exposed to typhoons.
“In the Philippines and Indonesia, safety is a persistent problem, driven by poor maintenance, weak enforcement of regulations and passenger overcrowding,” the review said.
Political tensions arising from China could also become a threat to the shipping industry in the region, according to Nicolas Thoreau, Regional Head of Marine Hull, Asia, AGCS.
“With one-third of all global trade passing through the South China Sea there are understandable concerns that an escalation in the dispute between China and Vietnam, Japan and China, South Korea and Japan or China and the Philippines could disrupt the operation of shipping,” Thoreau said on the review.
Piracy is also a threat, according to Thoreau, citing the 12 crew who were kidnapped from two cargo vessels, while a South Korean-flagged heavy load carrier was attacked in southern Philippines waters in October 2016.