South East Asia provides rich pickings for pirates

26 March 2015

According to the third annual Allianz Global Corporate & Specialty (AGCS) Safety and Shipping Review 2015, piracy is still a major concern for ship owners and operators.

Asia now accounts for up to 60 percent of all piracy incidents in the world with 145 reported cases. The region’s share of global figures is increasing as the number of attacks in other parts of the world – particularly the Gulf of Aden and Somalia – continues to trend downwards.

While Indonesia continues to remain the global hotspot for attacks, Bangladesh has been identified as a notable trouble spot for piracy strikes, with 21 reported incidents in 2014, up from 12 the year before.
Ron Johnson, Regional Marine Manager at AGCS Pacific in Sydney, said “When people think of piracy, they usually think of Somalia or the Gulf of Aden. However, due to numerous successful international naval campaigns and operations, the West Indian Ocean is far from being the most perilous.

“The most dangerous seas are in fact those of South East Asia, where pirates appear to be adopting the successful piracy model used in the Gulf of Aden, that is, holding ships and crew for ransom. This has resulted in a 75% annual increase in the number of vessels hijacked,” Ron said.

“The sustained increase in attacks should be of concern to Australian and New Zealand businesses involved in international trade, as over one third of all shipping travels through these waters each year, he said”

“Piracy attacks in the Malacca Straits have largely been subdued with the implementation of treaties between Malaysia, Indonesia, Thailand and Singapore, which have been backed by a strong naval presence. On the other hand, there has been a 150% increase in piracy incidents in the South China Seas, due to the vast coastal areas off Malaysia and Indonesia, combined with stretched law enforcement resources patrolling the area.

“Even minor skirmishes can have a significant impact on costs to seafarers and the wider shipping industry, from expensive rerouting and security costs, through to the rise in the cost of insurance premiums, not to mention the risk to cargoes and crews.” Ron added.

Highest number of marine losses in Asia

The AGCS report also highlights another area of concern for cargo owners - the large number of total losses in the Asia Pacific Region. More than a third of 2014’s total losses globally were concentrated in two maritime regions. As in 2013, the South China, Indo China, Indonesia and the Philippines region saw the highest number of losses (17 ships), closely followed by Japan, Korea and North China (12 ships).
In 2014, 43% of global total shipping losses occurred in the region, an increase in the longer-term trend figure of 35% for the since period 2005.

“The statistics show the Asia Pacific Region, as a whole, continues to be the predominant zone for total losses of shipping. This may affect Australian and New Zealand cargo owners as a large percentage of cargo exported from or imported to these countries is transhipped with local cargo owners having limited ability to manage the risk of ship selection and suitability,” Mr Johnson said.

Ultra Large mega container ships increase potential losses

Another important aspect covered in the report is the emergence of the era of ultra large mega container ships and the billion dollar loss shipping scenarios.

“The review into the loss of the 2008-built 8,110 teu container vessel MOL Comfort due to structural failure that was attributed to ‘uncertain factors’ has raised concerns about the safety of container ships and the increased risks that may be created by testing known limits for ship construction.

“With the emergence of mega container ships of 19,000+ teu, at a cost US$1 billion, there are increasing risks that need to be considered including salvage complications, the ability to locate and fight fires if they start within the hold and fewer ports capable of handling such large ships if they get into trouble,” Ron said.

“Losses of this magnitude are not factored into current insurance premium rates and are likely to stretch the known capacity of the marine insurance market,” according to Ron.

The review can be downloaded from the Allianz Global Corporate & Specialty website at

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