The average weekly mileage undertaken by vessels and the average number of port visits per week both dipped significantly from march to May this year as a result of the Covid-19 pandemic, but in most sectors there has been a recovery since then, according to James Whitlam, Data Strategist, Concirrus.
He was speaking on the opening day of IUMI 2020, originally intended to be held in Stockholm, Sweden, but now being held online.
In an analysis of vessel impact, Whitlam noted that the maritime sector was multi-layered, and different sectors had been impacted to varying degrees, and had also recovered to varying degrees.
Bulk carriers and container ships were impacted least, with business down from 11% to 16% in the early days, but with a significant recovery since. Passenger ships and yachting had not been so lucky, with the cruise sector still effectively shut down in the long-haul sector.
Whitlam said that weekly mileage was one of the basic metrics that Concirrus used to assess risk. The more time a ship is at sea, the more opportunities there were for a loss to occur.
For the three years up to 2020, weekly mileage had held a similar average and similar variations about the mean. 2020 data saw a significant fall. At the low point there had been a 10.8% reduction year on year. By the end of August it was still down by 4.8%.
Whitlam also noted that vessels were generally sailing shorter distances.
A second metric used by Concirrus was the average number of weekly unique port visits. That too had been steady over the past few years, at around 1.35 visits per week. For 2020 there was a significant fall to a low point of 1.21 visits (down 11.7%). By end of August still lagging by 6.5%.
Whitlam noted that, all other things being equal, one would therefore expect claims levels to fall.
However, all other things are not equal.
A big fall in bunker prices has generated changes in behaviour, in particular the routes chosen. Ultra-large container vessels had shown an increasing tendency to travel round the Cape of Good Hope instead of through the Suez Canal, for two reasons. One was that the fall in the price of fuel made the economics of going through the Suez Canal, at a cost approaching $400,000, less attractive than going the long way round. The second factor was that the extended journey time was less significant at a time that demand was sluggish.
However, Whitlam said that this raised several questions when it came to risk. Average wave height and average wave period had increased, and the time spent at sea when travelling from the Far East to Western Europe was 10 to 12 days longer.
Wave height from the Red Sea through the Mediterranean was about one metre, with a six-second wave period. Travelling round the Cape Of Good Hope saw the average wave height rise to two metres (reaching a peak of three metres when rounding the Cape) and a wave period of 12 seconds.
Whitlam noted that we had seen a large number of container ship losses in recent years as a result of bad weather. There had been lashing failures and cargo lost overboard, all of which contributed to insured losses.
Whitlam concluded by observing that, although there could be an instinctive feeling relating to increased risk, the Concirrus data-driven approach helped to quantify this.