Shipping Safety and Risk since Titanic

Despite greatly improved safety records in the century since Titanic, the maritime industry faces new challenges driven by the continued growth of worldwide shipping, according to specialist marine insurer Allianz Global Corporate & Specialty (AGCS).

In the 100 years since the sinking of the Titanic, the world commercial shipping fleet has grown to more than 100,000 vessels, yet overall shipping loss rates have declined from one ship per 100 per year in 1912 to one ship per 670 per year in 2009.

While factors such as new technologies and regulation have improved marine safety, new risks have emerged. AGCS’s report, “Safety and Shipping 1912-2012: From Titanic to Costa Concordia,” based on research from Cardiff University’s Seafarers’ International Research Centre (SIRC), highlights several key challenges for the industry including the growing trend to “super size” ships and cost pressures pushing ship-owners to source crews from emerging economies where standards of training and assessment can be inconsistent.

Other significant safety risks include:

• Reduced crewing numbers which may compromise margins of safety and encourage “human error” risks;

• Increasing bureaucracy on board ships;

• The continued threat of piracy off Somalia and elsewhere; and

• The emergence of ice shipping and its associated navigational and environmental complications.

“While the seas are safer than ever today, the industry needs to address these new risks proactively,” said Dr. Sven Gerhard, AGCS’s Global Product Leader Hull & Marine Liabilities. “For example, ultra-large ships pose challenges for insurers due to their sheer size and value, while others raise concerns on structural integrity and failure. While scale alone does not make these ships riskier, the increased sizes introduce specific risks that need to be addressed, such as salvage and recovery considerations and emergency handling.”

The largest modern container ships under construction are so big that there is space below deck for a basketball court, a full-sized American football stadium, and a spectator-filled ice hockey arena. Ships of this size raise questions of adequate loss coverage in the event of an incident and of potential structural limitations, said AGCS.

Human Error – The Weakest Link

The report also highlights the continued challenge of human error in maritime operations—a factor which remains critical despite a hundred years of technological and regulatory improvements in safety. Over 75% of marine losses can be attributed to a wide range of “human error” factors, including fatigue, inadequate risk management and competitive pressures, as well as potential deficiencies in training and crewing levels.

“As technological improvements reduce risk, so does the weakest link in the system, the human factor, become more important,” Gerhard said. “This is where the industry should focus most closely, so that best practice risk management and a culture of safety becomes second nature across the world fleet.”

Disasters Spur Improvements

While technologies such as RADAR or Global Positioning Systems have driven improved safety, major accidents have been the catalysts for key changes. For example, the 1914 SOLAS convention was triggered by the loss of the Titanic, and included regulations for ice navigation and life-saving equipment while the Herald of Free Enterprise disaster in 1987 spurred the adoption of the International Safety Management code, which the International Maritime Organization adopted in 1993.

“Historically, high profile shipping disasters have led to improvements in marine safety. And Costa Concordia is certain to be no different, whatever the result of the official investigations into this cause will be,” Gerhard concluded.

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