The global shipping industry is contending with mounting geopolitical and economic uncertainties, even as long-term maritime safety trends continue to improve, according to Allianz Commercial’s 2025 Safety and Shipping Review.
The report identifies a growing list of operational challenges for shipowners and insurers, including regional conflicts, sanctions, and supply chain realignments. These are compounded by ongoing risks related to vessel safety, such as fires and mis-declared cargo, as well as structural issues tied to aging fleets and shifting trade dynamics.
According to Allianz, the backdrop of conflict and economic fragmentation is reshaping risk exposure in global shipping. Ongoing tensions have been accompanied by incidents of attacks on vessels, detentions, sanctions enforcement, and damage to sub-sea cables.
The consequences of rising protectionism are also becoming clearer, with increasing tariffs and trade restrictions affecting global shipping lanes.
Approximately 90% of international trade is conducted via ocean freight. While insurers report improved maritime safety, particularly in terms of total losses, exposure to traditional perils like collisions and groundings remains. The industry recorded 27 total losses of large vessels in 2024, a record low compared to over 200 per year in the 1990s and down from 35 in 2023.
“The relevance of political risk and conflict as a potential cause of maritime loss is increasing with heightened geopolitical tensions,” said Capt. Rahul Khanna (pictured above), global head of marine risk consulting at Allianz Commercial.
He noted that while improvements in mitigating traditional risks are evident, emerging threats could offset these gains.
Trade relations between the U.S. and China have also contributed to shifting dynamics. The imposition of tariffs reaching as high as 145% before being temporarily reduced for 90 days has altered global shipping volumes.
As of mid-April, about 18% of global maritime trade was subject to tariffs, up from 4% in early March. Trade volumes dropped in the days following the so-called “Liberation Day” announcements, signalling possible volatility ahead for cross-border flows.
Another developing concern is the expansion of the shadow fleet. Allianz reports that approximately 17% of the world’s tanker fleet now operates under this classification, with roughly 600 vessels transporting Russian oil alone.
Industry estimates place the total number of shadow fleet tankers between 600 and 1,400, which could account for up to 20% of the global crude oil tanker fleet. These ships typically operate outside the scope of international regulation, often without adequate maintenance, oversight, or insurance.
“Although recent sanctions are making it harder for these vessels to trade, the shadow fleet continues to pose a serious risk to maritime safety and the environment,” said Justus Heinrich, global product leader, marine hull at Allianz Commercial. He said cleanup costs from a shadow fleet oil spill could reach US$1.6 billion.
Fires remain a leading cause of loss for large vessels. Seven total losses were attributed to fires in 2024, mirroring the previous year. Allianz recorded 250 fire incidents across all vessel types during the year, marking a ten-year high. Container ships, cargo vessels, and roll-on/roll-off ships accounted for 30% of those incidents, or 69 cases.
Over the past decade, more than 100 total vessel losses have been attributed to fires, many involving mis-declared cargo. Regulatory efforts to improve cargo declaration standards are underway, particularly as lithium-ion batteries and energy storage systems become more common in ocean freight.
“There is little doubt the shipping industry is becoming more resilient against the risks associated with large vessels, although we can by no means say they are under control,” Khanna said.
He noted that the low number of total losses in 2024 is encouraging given the scale of the global fleet, which exceeds 100,000 ships of over 100 gross tons.
In addition to physical perils, cyber threats have become a growing concern. Allianz noted that in the first half of 2024, ransomware attacks accounted for 58% of the value of large cyber claims exceeding €1 million in the maritime sector.
At the same time, GPS interference has been on the rise, with incidents of spoofing and jamming up 40% compared to the first quarter of 2023. These disruptions can mislead a vessel’s navigation system, creating risks for route planning, collision avoidance, and overall operational safety.
Khanna also pointed to the ongoing challenges linked to regional conflicts and supply chain disruption. While recent ceasefire agreements may ease some tensions, instability in regions like the Red Sea is expected to persist.
“Cyberattacks and GPS interferences are increasing. Ceasefires have raised hopes, but the Red Sea security threat and supply chain disruption will likely remain. Meanwhile, the green transition requires much work. The coming years will be decisive and will determine the path of the sector and global trade,” Khanna said.
What are your thoughts on this story? Please feel free to share your comments below.
