Piracy risks and mega ships pose new risks for Australian businesses

Piracy risks and mega ships pose new risks for Australian businesses

Sydney, 21 March 2014

Increased piracy threats to shipping have emerged closer to Australia.

Indonesian piracy attacks up 700% since 2009.

The development of ‘mega ships’ is creating new risks.

Mega ship incidents pose particular issues for Australia due to its large coastline and limited ports.

A new report by Allianz Global Corporate & Specialty (AGCS) – the Safety and Shipping Review 2014 - has highlighted some of the increasing risks for Australian and New Zealand businesses involved in the international shipping trade.

The report highlights the shift in the number of piracy incidents from the Gulf of Aden to Indonesia and West Africa, with piracy attacks in Indonesian waters up by some 700% in the past 5 years.

Ron Johnson, Regional Marine Manager for the Pacific at Allianz Global Corporate & Specialty, said “the shift of the piracy focus from the Gulf of Aden to a new hotspot in Indonesia should be of concern to all businesses in the Pacific region involved in international trade as all shipping between the region and Asia has to transverse these waters.”

Last year marked the arrival of the largest container vessel on record, which is over 400 metres long with the capacity to carry in excess of 18,000 shipping containers (teu).

The report also highlights an emerging shipping industry risk from these ‘mega ships’ because events involving serious casualties in remote locations could involve unprecedented and complex salvage operations.

For example, when an incident on board the 15,000 teu Emma Maersk in 2013 whilst transiting the Suez Canal, it was unable to make an unscheduled stop at a port to unload her cargo due to its size, highlighting the risks associated with these larger container vessels.

“Given Australia’s large coastline, and limited ports of refuge and repair facilities to handle such vessels, the arrival of these mega ships could heighten the risk to cargo owners. And there are even larger vessels capable of up to 24,000 teu on the horizon and which are expected to come into service in 2018,” Mr Johnson said.

Shipping casualties, along with other emerging risks on the rise, such as the use of alternative fuels such as LNG and Arctic trading routes, are also covered in the report.

The report is recommended reading for anyone interested in the international shipping trade and can be downloaded for the Allianz Global Corporate & Specialty website at www.agcs.allianz.com/insights.

Allianz Australia
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Allianz Australia delivers a wide range of personal, commercial and corporate insurance products and services to more than 2 million policyholders. Over 50% of Australia’s top 200 BRW-listed companies have some form of insurance cover with the group and the group provides workers compensation services to around one-fifth of Australian employees.

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