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Cargo risk at sea/port continues to rise in 2016, ship damage costs spike
OVERALL losses in the maritime industry declined in 2016 compared to the previous year, however, cargo accumulation risk onboard vessels and at port continued to climb, according to a report from the International Union of Marine Insurance (IUMI).
The frequency of major vessel casualties had been falling on a year-on-year basis until 2015, when they recorded a "sharp upturn which continued in 2016", according to IUMI.
Total vessel losses, on the other hand, carried on falling as a decline in claim frequency was offset slightly by an uptick in the average cost of claims, American Shipper reported.
IUMI noted that 20,000-TEU vessels can carry cargo with a potential value of US$985 million, signifying a significant increase in risk concentration for carriers and cargo insurance underwriters.
"Accumulation risk in ports, particularly Chinese ports, was thought to be even greater," the report said.
"It was estimated that the value of cargo throughput at Shanghai could reach $1.6 billion a day, Shenzhen $681 million and Tianjin $477 million. The explosion at Tianjin in 2015 also resulted in a significant loss but might have been much worse. The total cargo estimated to be onboard the 754 ships in the port on the day of the incident would have amounted to more than $53 billion."
Said IUMI facts & figures committee chairman Donald Harrell: "It is gratifying to see the year-on-year decrease in total losses, but we must take particular notice of the recent increase in major casualties and the reasons for this."
The frequency of major vessel casualties had been falling on a year-on-year basis until 2015, when they recorded a "sharp upturn which continued in 2016", according to IUMI.
Total vessel losses, on the other hand, carried on falling as a decline in claim frequency was offset slightly by an uptick in the average cost of claims, American Shipper reported.
IUMI noted that 20,000-TEU vessels can carry cargo with a potential value of US$985 million, signifying a significant increase in risk concentration for carriers and cargo insurance underwriters.
"Accumulation risk in ports, particularly Chinese ports, was thought to be even greater," the report said.
"It was estimated that the value of cargo throughput at Shanghai could reach $1.6 billion a day, Shenzhen $681 million and Tianjin $477 million. The explosion at Tianjin in 2015 also resulted in a significant loss but might have been much worse. The total cargo estimated to be onboard the 754 ships in the port on the day of the incident would have amounted to more than $53 billion."
Said IUMI facts & figures committee chairman Donald Harrell: "It is gratifying to see the year-on-year decrease in total losses, but we must take particular notice of the recent increase in major casualties and the reasons for this."
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