Gulf of Guinea, West Africa hot-spot for global vessel losses – says Allianz report

• Warns of maritime volatility, uncertainties

• Hijackings, crew kidnappings, hostages high

• World lost $18bn to Somali pirates activity 

Ben Eguzozie

Africa’s Gulf of Guinea and West Africa, two regions described as hotspot for vessel hijackings, crew kidnappings, and hostages globally, are projecting alarming trends that are threatening to reverse a decade-long remarkable trajectory witnessed in global maritime safety in world trade – says a new Safety and Shipping Review by marine insurer, Allianz Commercial, set to be published later this week.

Given that up to 90 percent of international trade is transported across oceans, ensuring the safety of maritime operations is of utmost importance, industry experts declare.

The Safety and Shipping Review 2024 by Allianz Commercial said the global shipping industry has made remarkable progress in reducing vessel losses over the past decade.

However, the report highlights alarming trends that threaten to reverse this positive trajectory. The trends include that: 

-In 2023, the global shipping fleet experienced a record low of 26 vessel losses, down by more than one-third year-on-year and by 70 percent over the past decade.

-The West African coast witnessed 26 losses and Arabian Gulf and approaches 38 losses from 2014-2023.

-Piracy incidents against ships globally increased in 2023, with the conflict in Gaza opening the floodgates for attacks in the Red Sea with more than 100 ships targeted.

-Africa’s Gulf of Guinea is a hot spot for vessel hijackings, crew kidnappings, and hostages globally. It accounts for three out of four reported vessel hijackings, along with all 14 crew kidnappings and 75 percent of crew hostages.

The re-emergence of Somali-based piracy activity is a cause for concern, potentially leading to a period of renewed hijackings and piracy attacks at sea. Between 2005 and 2011, Somali pirates seized 149 ships and over 3,700 crew for ransoms totaling in excess of an estimated $300 million, and caused $18 billion yearly loss to the world economy in cost of trade.

Also, the Allianz report said ongoing disruption caused by drought in the Panama Canal and the need to reroute container ships from the Suez Canal to the Cape of Good Hope are adding to the challenges faced by the industry. At least 586 container vessels had been rerouted by the first half of February 2024 adding 10 days sailing time to each trip.

Rerouting container ships result in a 70 percent increase in greenhouse gas emissions for a round trip from Singapore to Northern Europe, the report said.

The marine insurer in its report observed how 30 years ago the global shipping fleet lost was around 200 large vessels a year, but noted that this total fell to a record low of 26 in 2023, a decline of more than one third year-on-year and by 70 percent over the past decade.

The report stated, however, that maintaining this status quo would be difficult because of the fact that shipping is increasingly subject to growing volatility and uncertainties from war and geopolitical events, the consequences of climate change, as well as ongoing risks resulting from the trend for larger vessels.

“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, impacting 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 ongoing 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,” says Rahul Khanna, global head of marine risk consulting, Allianz Commercial.

Diving into the details, the report notes that Southeast Asia recorded the highest total losses of the maritime regions of the world. For instance, in 2023, 26 total losses were reported globally compared with 41 a year earlier; noting that there have been more than 700 total losses reported over the past decade (729). 

Global loss hotspot was assigned to South China, Indochina, Indonesia and the Philippines maritime region, where over the past year and decade, respectively, the number was 184.

Also, cargo ships accounted for over 60 percent of vessels lost globally in 2023 with foundered (sunk) being the main cause of all total losses, accounting for 50 percent.

Geopolitical tensions and conflicts are also affecting shipping, the report notes, adding that “global shipping’s increasing vulnerability is signposted by recent incidents including 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.”

According to Khanna, 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. He feared that more technologically driven attacks against shipping and ports are also a distinct possibility.