RISK MANAGEMENT AND INSURANCE IN MARITIME LOGISTICS

As maritime remains a cornerstone of global trade, growing political instability and natural disasters are making effective risk management more essential than ever. Insurance systems now serve as a vital safeguard to protect the continuity of the transport chain amid these rising risks. Türkiye’s growing momentum in this area signals its potential to shape the global maritime landscape

For centuries, maritime transport has played a central role in shaping global trade, and that remains unquestionably true today. Despite the rapid advancement of technology, around 90% of world trade still moves by sea. Even though other modes of transport work in integration with maritime transport, and although maritime shipping has undergone some changes over the years, it still remains one of the most important methods of transportation today.

ADVANCING TECHNOLOGIES AND EMERGING ROUTES

Not long, just 25 to 30 years ago, partial loads once handled through traditional methods like “kırk ambar” can now be shipped across oceans, even in small volumes, with the use of containerization. Today, even mid-sized companies can conduct import-export operations across continents by sea, and they can do so affordably. That’s the enduring power of maritime shipping. Until very recently, the Northern Route was not considered commercially viable for shipping. However, due to global warming, it has now emerged as a new route for commercial vessels. There is a well-known saying: “Without maritime transport, one half of the world would freeze and the other half would starve”. While somewhat exaggerated, it perfectly captures how vital shipping remains to the world economy.

RISK FACTORS AND CURRENT THREATS IN MARITIME TRANSPORT

As vital as maritime transport is, it also comes with substantial risks. From the moment a ship is chartered to transport cargo until it reaches the destination port and completes unloading, the cargo must navigate through numerous challenges, including operational risks, natural disasters, and marine perils in particular, to arrive at its destination.

At last year’s annual meeting of the International Union of Marine Insurance (IUMI), one of the main topics discussed was that “political uncertainty” is considered the most undesirable condition for the insurance sector. It is clear that ships navigating international waters have been negatively impacted by the Russia–Ukraine war, the Israel–Gaza conflict zone, Libya, Iran, Belarus, Syria, as well as by piracy in the Gulf of Guinea, Somalia, and the Strait of Malacca. Many other countries, including Venezuela, Cuba, and North Korea, are also under threat of embargo. In the past 18 months, due to attacks by Houthi forces on ships travelling through the Gulf of Aden en route to the Suez Canal, the number of canal transits has dropped by 50%.

The rerouting of vessels expected to pass through this corridor via the southern coast of Africa leads to billions of dollars in additional fuel costs, billions more in personnel expenses, and increased freight rates due to fleets being tied up longer, all of which place significant pressure on global economies. On top of political instability, trade policies introduced during former U.S. President Donald Trump’s term, such as increased tariffs and the threat of hefty charges for Chinese- built ships docking at U.S. ports, keep inflating freight costs, particularly for specific vessel classes. In this climate of geopolitical unpredictability, ship hull insurers and protection and indemnity (P&I) clubs are offering high levels of coverage despite facing uncertain risk landscapes. The risks posed by natural disasters and storms, due to the cumulative nature of their sudden impacts, negatively affect reinsurers’ results and, in turn, increase the cost of reinsurance. Despite all this, the surplus capital in the reinsurance market has prevented difficulties in obtaining coverage. With an estimated market size exceeding USD 38.9 billion, marine insurance remains one of the world’s largest insurance segments.

TÜRKİYE’S RISE IN MARINE INSURANCE

Türkiye has taken strong steps in nearly every aspect of the maritime industry, from shipbuilding and marine tourism to seafaring personnel, fisheries, vessel operations, and ship ownership. A particularly notable milestone is the recent acceptance of Türk Loydu into the International Association of Classification Societies (IACS). This membership has enabled Türk Loydu to take an active part in the key committees that guide international maritime affairs, securing its position among the industry’s leading decision-makers. On another front, Turkish P&I, which entered the marine insurance market nearly 12 years ago, has become a strong player, especially for Turkish shipowners and operators, as well as in Europe and surrounding regions, by offering billions of dollars in coverage. These developments highlight Türkiye’s significant progress toward becoming a prominent force in global maritime affairs. With Greece gradually handing over its long-standing leadership in maritime transport to China, the changing global dynamics are opening up new opportunities for Türkiye. These shifts present an opportunity to expand both service exports and intellectual capital exports. We firmly believe that if we take the right steps and focus our investments on maritime activities, such opportunities will keep growing in the future.