Allianz Safety and Shipping Review 2018 – Cyber, Climate Risks and Human Error Threaten Shipping’s Safety Progress

( Shipping is the lifeblood of the global economy, transporting 90% of global trade. Allianz Global Corporate & Specialty (AGCS) recently released its annual report, Safety & Shipping Review 2018. The report highlights cyber, climate risks and human error as the main factors threatening shipping’s safety progress during the 12 months prior to December 31, 2017 (full report can be downloaded at the bottom of this article).

Highlights from this year’s findings, which analyzes reported shipping losses over 100 gross tons, include:

  • Shippers continue to grapple with balancing the benefits and risks of increasing automation on board. The NotPaetya cyber-attack caused cargo delays and congestion at nearly 80 ports, further underlying the growth of cyber risk.
  • Changing climate conditions bring new route risks, particularly in the Arctic and North Atlantic Waters – over 1,000 icebergs drifted into North Atlantic shipping lanes last year.
  • 94 large ships lost worldwide in 2017, down by more than a third over 10 years. Bad weather involved in 1 in 4 losses.
  • Accident hotspot – South China and South East Asian waters lost 30 ships.

Large shipping losses have declined 38% over the past decade, according to Allianz Global Corporate & Specialty’s (AGCS) Safety & Shipping Review 2018, with this downward trend continuing in 2017. Recent events such as the collision of the oil tanker “Sanchi” and the impact of the NotPetya malware on harbor logistics underscore both the traditional and emerging risk challenges faced by the shipping sector.

There were 94 total losses reported around the shipping world in 2017, down 4% year-on-year (98) – the second lowest in 10 years after 2014. Bad weather, such as typhoons in Asia and hurricanes in the U.S., contributed to the loss of more than 20 vessels, according to the annual review, which analyzes reported shipping losses over 100 gross tons (GT).

“The decline in frequency and severity of total losses over the past year continues the positive trend of the past decade. Insurance claims have been relatively benign, reflecting improved ship design and the positive effects of risk management policy and safety regulation over time,” says Baptiste Ossena, Global Leader Hull & Marine, AGCS. “However, as the use of new technologies on board vessels grows, we expect to see changes in the maritime loss environment in the future.”

New risk exposures for the shipping sector include:

  • Ever-larger container ships pose fire containment and salvage issues.
  • Changing climate conditions bring new route risks, particularly in the Arctic and North Atlantic waters.
  • Environmental scrutiny is growing as the industry seeks to cut emissions, which brings new technical risks coupled with the threat of machinery damage.
  • Shippers continue to grapple with balancing the benefits and risks of increasing automation on board. The NotPetya cyber-attack caused cargo delays and congestion at nearly 80 ports, further underlying the growth of cyber risk.

“New” Bermuda Triangle, Dangerous Seas, and Friday 13th

Nearly one third of shipping losses in 2017 (30) occurred in the South China, Indochina, Indonesia and Philippines maritime region, up 25% annually, driven by activity in Vietnamese waters. This area has been the major global loss hotspot for the past decade, leading some media commentators to label it the “new Bermuda Triangle.” The major loss factors are actually weather – in November 2017, Typhoon Damrey caused six losses, busy seas and lower safety standards on some domestic routes.

Outside of Asia, the East Mediterranean and Black Sea region is the second major loss hotspot (17) followed by the British Isles (8).There was  a 29% annual increase in reported shipping incidents in Arctic Circle waters (71), according to AGCS analysis.

Cargo vessels (53) accounted for more than half of all vessels lost globally in 2017. Fishing and passenger vessel losses are down year-on-year. Bulk carriers accounted for five of the 10 largest reported total losses by GT. The most common cause of global losses remains foundering (sinking), with 61 sinkings in 2017. Wrecked/stranded ranks second (13), followed by machinery damage/failure (8).

Analysis shows Friday is the most dangerous day at sea – 175  of 1,129 total losses reported have occurred on this day over the past decade. Friday the 13th really can be unlucky – three ships were lost on this day in 2012 including the Costa Concordia, the largest-ever marine insurance loss.

Human Error: Still a big issue. Data can help.

Despite decades of safety improvements, the shipping industry has no room for complacency. Fatal accidents such as the “Sanchi” oil tanker collision in January 2018 and the loss of the “El Faro” in Hurricane Joaquin in late 2015 persist, and human behavior is often a factor. It is estimated that 75% to 96% of shipping accidents involve human error. It is also behind 75% of 15,000 marine liability insurance industry claims analyzed by AGCS – costing $1.6bn.

“Crews are under increasing pressure as shipping supply chains are streamlined for greater efficiency. While vessels once spent weeks in port, turn-around times for a cargo ship are now measured in days; such tight schedules can have a detrimental effect on safety culture and decision-making,” stated Andrew Kinsey, Sr. Marine Risk Consultant, AGCS. “There is always the need to strike the right balance between safety and commercial pressures. We need to look at behavior modification and how to get personnel to move away from normalizing risk.”

Moving forward, better use of data and analytics could help as the shipping industry produces a significant amount of data, but could utilize it better to produce real-time findings and alerts. New insights from crew behavior and near-misses can identify trends as predictive analysis may be the difference between a safe voyage and a disaster.

Behavioral and cultural risk need addressing. Technology can help

Despitehuge improvements in maritime safety, fatal accidents at sea persist. Human error continues to be a major driver of incidents and captains and crews are under increasing commercial pressure as supply chains are streamlined. Tight schedules can have a detrimental effect on safety culture and decision-making leading to the“normalization of risk”. Better use of data and analytics can help to address this. The shipping industry has learned from losses in the past but predictive analysis is important for the future. New insights from crew behavior and near-misses can help identify human error trends. Sensor technology can also enhance risk management. For example, hull stress monitoring sensors could be linked to ship navigation in bad weather, feeding real-time information on structural integrity. However, over-reliance on technology on board must be avoided. Continual training is imperative to ensure the right balance is achieved between technology and human intervention.

Industry’s struggle with container ship fires continues

Major fires oncontainer vessels are one of the most significant safety issues. The blaze on the ultra-large container ship (ULCS) Maersk Honam in March 2018 is one of a number of incidents in recent years. Issues driving container ship fire exposures include the adequacy of firefighting capabilities as vessels become larger, misdeclaration of cargo, salvage challenges and time taken to access a port of refuge. ULCS provide economies of scale but the industry needs to ensure risk management standards are up to speed, as larger container ships are on their way.

Record-breaking hurricane season brings supply chain and yacht problems:

Hurricanes Harvey, Irma and Maria (HIM) and other severe weather events in 2017, such as Typhoons Damrey and Hato, show traditional maritime risks should not be overlooked. AGCS analysis shows bad weather directly contributed to at least 21 total losses in 2017 and this could yet increase further (see page 9). Fuel market, cargo, cruise ship and port operations were also disrupted, leading to natural catastrophes being ranked the top risk by shipping experts in the Allianz Risk Barometer 2018. Shippers need to consider scenarios where multiple locations are impacted when drawing up contingency plans.

Shippers get serious about cyber threat as penalties increase

Cyber incidents like the global NotPetya malware event have served as a wake-up call for the shipping sector. Many operators previously thought themselves isolated from this threat.  At the same time, new European Union laws such as the Network and Information Security Directive (NIS), which requires large ports and maritime transport services to report any cyber incidents and brings financial penalties, will exacerbate the fall-out from any future failure – malicious or accidental.

Other key risk topics include:

Autonomous shipping and drones:  Legal, safety and cyber security issues are likely to limit widespread growth of crewless ships, for now. Human error risk will still be present in decision-making algorithms and onshore monitoring bases. Drones and submersibles, however, have the potential to make a significant contribution to shipping safety and risk management. Future use could include pollution assessment, cargo tank inspections, monitoring pirates and assessment of the condition of a ship’s hull in a grounding incident.

Llegarán más de 80 cruceros a Colón

Llegarán más de 80 cruceros a Colón

Alma Solís

Alrededor de 80 cruceros llegaran a la ciudad Atlántica de Colón en Panamá desde septiembre hasta diciembre así lo dio a conocer la empresa que maneja el Puerto de Cruceros Colón 2000, calculando un derrame económico para el país de alrededor de US$25 millones.

La temporada de cruceros regular   comenzará   en el mes de septiembre y se intensifican   la llegada de cruceros en los meses de octubre, noviembre y diciembre.

Se calcula que aproximadamente 200,000 turistas bajen a conocer los atractivos turísticos cercanos al puerto caribeño y si se toman en cuenta los cálculos de la Autoridad de Turismo Panamá que   maneja cifras de la FCCA, la Asociación de Cruceros de Florida y el Caribe, que indica que cada pasajero que baja a puertos   gasta     US$125.00 el resultado es un derrame económico al país US$25 millones.

Los cruceristas realizan giras que comercializan las operadoras   panameñas están las visitas a   las esclusas de Gatún y las de Agua Clara en el lado Atlántico del canal. Además de hacer compras en centros comerciales de la ciudad de Panamá, Zona Libre y   giras ecoturísticas.

De acuerdo con Colón 2000, el   crucero estrella de este puerto de cruceros sigue siendo el Monarch de Pullmantur que   programa por lo menos   16 salidas desde el puerto colonense. Sale todos los viernes.

El calendario de finales del año 2018 está adornado con llegadas de cruceros como el Infinity de Celebrity Cruises, el Island Princessm, el Norwegian Pearl que traen además cruceristas norteamericanos,   ingleses, y alemanes. En el mes de noviembre se esperan 31 cruceros y otros   30 cruceros en diciembre.





Ascertain The Correct Value For Yacht Insurance

Yacht insurance should be of top priority when investing in your own craft. If insurers request a valuation they will require a surveyor to do this but in reality, a yacht broker is best placed to give a valuation as they are dealing with these things on a daily basis and know what’s happening in the market.

There are several challenges faced when assessing the value of a yacht. An owner often feels his yacht is worth more than it actually is, in some cases looking to keep a sum insured as close to his purchase price as possible so that this would be paid in the event of a total loss (no matter how long he has owned the yacht) or just feeling its worth more than it is. If a refit has taken place owners often wish that all costs are added to the previous value in the belief that the refit has added more value to the yacht. Unfortunately, the amount spent on a refit does not often increase a value of a yacht and insurers would usually consider an increase
in value of about 2/3rds of the refit cost.

It is fair to say that a production yacht will lose quite a lot of value immediately after it is delivered and then will depreciate in value year by year after a couple of years. Insurers will usually allow the purchase price to be the sum insured for a few years before expecting
an owner to re-evaluate things but if an owner is unrealistic in the value of a yacht it can have serious consequences.

If a yacht is wildly over insured and there is a total loss, even with an agreed value policy, insurers may question the value. If this cannot be proven insurers may reserve the right to pay a proportion of a claim in relation to the amount over insured. Very often we see owners wishing to insure a lower value in order to save premium. In the event of a partial loss where insurers are required to replace new for old, the value could be questioned and, again, insurers may be liable only for the relative proportion in settlement. In the event of a total loss insurers will pay the full amount but then, for a very small saving in premium, the owner has lost a significant amount of money. Most yacht insurance policies today are

All Risk policies based on Agreed Values and do not apply a reduction when replacing parts in older yachts. However, there are some insurers still working on the outdated Institute Yacht Clauses which are totally inadequate (especially for motor yachts) with many exclusions and leaves the burden of proof on the owner to demonstrate to insurers that his claim is valid whereas the more modern All Risks policies are the other way around where insurers have to prove a claim is not covered by insurance if they do not wish to pay. Some insurers will also base their cover on Current Market Value which, like car insurance, only pays the amount insurers deem a current market value at the time of a loss whereas an Agreed Value fixes the value at the inception of cover. Applying a reduction on the cost of parts when a repair takes place due to an age of a yacht can give an owner a very rude awakening when trying to have a claim settled as, on top of his deductible, he may find himself receiving a settlement which is a fraction of what he expects.

The above reminds us of the importance of always reading the terms and conditions provided and have this done by someone who fully understands the consequences of an insurance policy being misunderstood or a cover being bought purely on the basis of price. Further, it demonstrates the important value of appointing a specialist broker who understands what to look for in a policy and advise accordingly. Never be afraid to ask your broker questions. He is there to advise you and it is his legal requirement to look after
your best interests.




Real Life Incident: Fuel Spray On Hot Surface Leads To Fire In Ship’s Engine Room

Real Life Incident: Fuel Spray On Hot Surface Leads To Fire In Ship’s Engine Room

While underway a main engine low fuel pressure alarm sounded on the bridge. The crew member on watch entered the unmanned engine room and identified a high-pressure fuel leak spraying on the port engine’s turbocharger. There was also a large quantity of diesel fuel in the bilge.

The Master arrived on scene just as the fuel ignited and began a fire. He attempted to extinguish the fire using a portable fire extinguisher, but without success. He activated the general alarm, secured the hatches, had crew members secure the ventilation dampers and closed the remote fuel shut-off valves to the engine room. The fire then quickly self-extinguished.

The investigation identified the source of the fuel leak as a rupture on a flexible fuel hose connected to the fuel filter assembly. The fuel filter assembly and its components were installed relatively close to the turbocharger on the inboard side of the engine. The heat radiating from the turbocharger components was very high and probably led to the degradation of the rubberised hoses nearby. However, the installation was in accordance with the manufacturer’s marine engine manual.

Lessons learned

  • Closely inspect fuel and lubricating systems, from source tanks to system endpoints. Think about system vulnerabilities such as loose or missing pipe clamps and securing devices, wear or chafing from vibration that is affecting hoses, and pipes or tubes that may be poorly secured. Make sure that plastic piping is not close to hot spots.
  • Ensure all insulation, blankets and lagging are maintained and kept tight. Look for areas where released fluids may make contact. Where spray shielding is used, check that it is kept in place; if it is not used, consider adding shielding.
  • Minimise the use of non-metallic flexible hoses in systems carrying flammable liquids, particularly around engine areas where leakage or spray may reach hot spots capable of igniting the fluids. Consult with engine representatives if modifications are needed





Canal de Panamá anuncia cambios en su sistema de reserva ante cancelaciones de GNL

El Canal de Panamá anunció cambios al Sistema de Reservación de Tránsitos para los buques neopanamax, los cuales serán efectivos a partir del 1 de octubre de 2018 con lo cual trata de optimizar los espacios ante cancelaciones en algunos segmentos como el del Gas Natural Licuado que tiene un promedio de 40% de cancelación.

La propia vía indicó que  el segmento de más rápido crecimiento, es el de los buques de GNL pero estos usan sólo el 60% de sus reservaciones. “Los cambios anunciados permitirán que el Canal de Panamá optimice y acomode mejor los tránsitos de GNL en el futuro, al mismo tiempo, se maximice para todos los segmentos” dijo la administración.

Una fuente explicó a SNIP-Noticias que en la práctica lo que estaba sucediendo era que los clientes de GNL hacían las reservas en el primer periodo que es de 365 días y en algunos casos aun no tenían confirmadas la ruta o definido si utilizarían la vía. La razón seria que querían utilizar el Canal de Panamá en caso de que fuera necesario, pero debido a los tiempos que tenían para reservar y el comportamiento de su propio mercado no era suficiente para ya tener la ruta definida.

La administración del Canal buscó la forma de atender a estos clientes y de igual forma optimizar el uso ya que si 40% cancelaba otros clientes podrían aprovechar esa reserva. Al dar un nuevo periodo de reserva de 80 días tanto el cliente de GNL, y el Canal ganan, no se se desaprovecha la reserva y el GNL tiene más tiempo para definir su ruta y poder reserva con tiempo.

Aseguraron que la cantidad total de espacios disponibles para los buques neopanamax y la prioridad para ciertos segmentos no cambiará. “Sin embargo, al adaptar el proceso de reserva, junto con las tarifas de cancelación reestructuradas para las prácticas actuales de GNL, el Canal de Panamá tiene como objetivo reducir las reservas no utilizadas, mejorando así la utilización y la confiabilidad en el servicio” dijeron

Según la administración de la vía, estos cambios incluirán un periodo de transición para aquellos buques de GNL que hayan obtenido cupos durante el actual periodo de reserva 1 (365 días), lo que permitirá liberarlos sin costo de cancelación.

“Las modificaciones son un paso positivo para las esclusas neopanamax, y tienen en cuenta el levantamiento de ciertas reglas de navegación a buques de Gas Natural Licuado (GNL) y los comentarios constantes de los clientes, así como el análisis continuo del uso de las esclusas neopanamax y el valor que el mercado otorga al Canal ampliado” dijo la entidad administradora de la vía acuática panameña.

Sustentan la decisión del Canal de implementar estas modificaciones luego de dos años de experiencia adquirida en tránsito de buques neopanamax, incluidos buques de GNL, que transitaron por primera vez por la vía interoceánica luego de la inauguración del Canal ampliado en 2016.

Por su parte, el administrador  del Canal de Panamá Jorge Luis Quijano dijo que estaban comprometidos en entender y satisfacer las cambiantes necesidades de la comunidad marítima global. “Estos cambios, guiados por el aporte de nuestros clientes, la planificación estratégica y años de experiencia, son un paso esencial para garantizar la continua disponibilidad del Canal ampliado para todos”, aseguró Quijano.

Con los cambios los clientes pueden reservar tránsitos durante tres periodos determinados por los días previos a la fecha de tránsito requerida. Asimismo, las modificaciones anunciadas introducirán un nuevo espacio de reserva dentro del primer periodo, llamado “periodo de reserva 1.a (80 días)”, que estará acompañado por modificaciones correspondientes a la duración y redistribución de espacios dentro de cada fase de reserva.

“Vimos la oportunidad de aumentar la eficiencia y la capacidad del Canal de Panamá para los clientes en todos los segmentos al abordar mejor las necesidades planteadas por la industria de GNL”, dijo Silvia de Marucci, gerente ejecutiva de la División de Análisis Económico e Investigación de Mercado del Canal de Panamá. Agregó que para hacerlo, “adaptamos el Sistema de Reserva de Tránsitos y nos alineamos con el mercado de entrega inmediata y los contratos a largo plazo (Programa de Entrega Anual) en el segmento de GNL y su programación, con el levantamiento de ciertas restricciones para los buques de GNL”.

“Las nuevas modificaciones al Sistema de Reservación de Tránsitos son parte de una serie de esfuerzos para proporcionar una mayor flexibilidad y confiabilidad de acuerdo con las crecientes necesidades del mercado. Esto incluye la decisión que el Canal anunció en junio de levantar las restricciones impuestas de luz natural y cumplir con las restricciones de los tránsitos de GNL a partir del 1 de octubre de 2018, así como también el cupo de reservación adicional de neopanamax que se implementó en mayo, lo que da un total de ocho cupos por día” puntualiza.



PDVSA to Divert Tankers to Nearby Port after Collision

PDVSA to Divert Tankers to Nearby Port after Collision

© Evren Kalinbacak / Adobe Stock

Venezuela’s state-run PDVSA is organizing a contingency plan to address its latest oil-export problem following a minor accident last week at the country’s main crude terminal, two sources from the firm told Reuters on Friday.

A tanker collision that damaged Jose port’s South dock and forced its closure has added to delays in loading crude for export, especially to customers such as Russia’s Rosneft and U.S.-based Valero Energy Corp and Chevron Corp.

Oil tankers that were assigned to load diluted and upgraded crudes at Jose’s South dock would be diverted to neighboring Puerto la Cruz terminal under the proposed plan. Vessels will be limited to up to 500,000 barrels each, one of the sources said.

“We will start moving crude out through Puerto la Cruz, to be delivered to customers that can accept cargoes of up to 500,000 barrels,” one of the sources said.

PDVSA is keen to recover oil export capacity after the country’s main source of revenue fell 26 percent to 1.22 million barrels per day (bpd) in the first half this year as production fell to historic lows.

The declines have crippled its economy, which is plagued with hyperinflation, shortages of food, water and medicine. The port accident put new strains on PDVSA’s efforts to fulfill its supply contracts.

The firm earlier this year asked some customers to bring larger tankers to cut a backlog around Jose port. Most vessels currently waiting were expected to load over 1 million barrels of heavy crude each, according to one of the sources and Thomson Reuters vessel tracking data.

It is unclear which customers will accept the new terms.

PDVSA said in a tweet on Friday that work to replace the damaged fender at Jose’s South dock has started. It did not say how long the contingency plan would be in place.

“Our goal is making tanker activity fluid and fulfill our (export) obligations,” another source said.

PDVSA also is considering diverting tankers carrying imported naphtha to Puerto la Cruz. It imports naphtha to dilute Venezuela’s extraheavy oil and turn it into exportable grades.

Jose’s South dock was refurbished in 2016 to increase its export capacity. It was later designated as PDVSA’s main hub for naphtha imports. Along with two other berths and two single monobuoy systems, Jose handles three-quarters of Venezuela’s crude exports.

The country’s crude production in July fell to 1,469 million bpd, according to official figures reported to OPEC, its lowest level in over 60 years.