According to Allianz Commercial's annual Safety and Shipping Review, the shipping industry often highlights a decline in total losses and an improvement in safety records. However, the 2026 edition raises an important issue that often goes unnoticed: machinery damage or failure was the primary cause of over 50% of all shipping incidents worldwide in 2025.
It's not fires, collisions, or groundings that lead to most incidents; it's machinery problems. This has been the leading cause of shipping issues for the last ten years, and the financial impact is worsening.
The statistics from Lloyd’s List Intelligence are telling. In 2025, there were 2,818 reported incidents on ships over 100 gross tons, with machinery damage or failure being responsible for 1,505 of those incidents—53% of the total. Over the decade from 2016 to 2025, machinery issues accounted for 12,991 incidents out of a global total of 28,660, which is 45%. No other cause comes close. Vessel collisions, the second most common cause, accounted for 2,822 incidents, while fires and explosions totaled 1,952. Year after year, machinery problems have been the most significant issue across all regions.
Beyond just incident counts, the cost of machinery claims is a critical concern. According to the Allianz review, machinery claim costs have not returned to pre-pandemic levels. Costs in 2024 and 2025 were 33% higher than they were before COVID-19 and in 2021. The International Union of Marine Insurance predicts these costs will increase by another 7% to 22% in the next five years, posing challenges for those negotiating hull and machinery renewals.
This inflation in costs is driven by structural issues that the Allianz review makes clear are not easing. There's a global shortage of skilled marine engineers and technicians, increasing repair costs. Additionally, wait times for major engine components like crankshafts and fuel injection systems remain long. Repair workshop rates have also risen due to higher energy and steel prices.
The situation is made worse in the Persian Gulf due to biofouling, a unique risk. One ship leaving the region was found with marine growth covering 40% of its underwater hull and entire propeller. Severe biofouling not only raises fuel consumption but also alters propeller load characteristics, putting extra stress on bearings and the main engine.
A propeller covered in barnacles operates inefficiently, requiring the main engine to exert more effort to maintain speed. This extra strain can lead to significant issues, especially for engines already in need of maintenance.
The Allianz review also discusses the use of non-original equipment manufacturer (non-OEM) parts. Many shipowners report a rise in blackouts linked to these components. While using non-OEM parts may seem logical—given availability and cost differences—the risks can be severe. A notable incident involving the container ship Dali illustrates this: a loose wire in the electrical system led to two blackouts, causing propulsion and steering failures that resulted in six worker deaths. The Allianz review warns that using non-OEM parts can also complicate insurance claims.
The aging global fleet adds another layer to these machinery risks. In 2025, the average age of the global shipping fleet reached 23 years, up from around 20 years at the pandemic's start. Vessels over 20 years old now make up nearly a quarter of the global container ship fleet, the highest rate since the 1970s.
Data from Allianz shows that vessels over 20 years account for more than half of all safety incidents. This isn't just numbers; it reflects ongoing wear and tear, delayed maintenance, and the difficulty of finding original parts for older machinery.
Geopolitical factors are exacerbating the fleet’s aging problem. Conflict in the Middle East has led to increased demand for oil tankers, extending the operational life of vessels that would otherwise be scrapped.
The shadow fleet trading oil under Western sanctions tends to rely on older ships, which are cheaper and often have less rigorous maintenance standards. This makes them a higher risk if machinery fails in sensitive areas.
Another developing issue is the switch to dual-fuel propulsion to reduce emissions. The number of dual-fuel vessels has doubled since 2024, with over half of new container ships currently on order capable of using alternative fuels. However, the Allianz review highlights the complexities this introduces, as crews need more training to manage these engines, increasing the risk of human error during machinery breakdowns.
Alternative fuels bring unique challenges, such as the limited shelf life of biofuels and the toxic nature of ammonia, which complicates handling and maintenance. Current fuel quality issues are also leading to mechanical problems due to more effective refining processes.
At the core, the machinery issues stem from a resourcing problem. Ships are now operated with smaller crews than ever before, compromising safety and efficiency. The Allianz review suggests that the increased cost of machinery claims, worsened by the ongoing conflict in the Middle East, indicates the need for industry stakeholders to address the underlying issues instead of treating each machinery failure as a separate incident.
While there is a positive long-term trend in overall shipping losses, the persistent machinery damage and failure remain a severe problem. With financial impacts worsening and various factors at play, the industry faces significant challenges ahead. The machinery problem is one of the most persistent and critical safety concerns in shipping, warranting immediate attention.