Fires aboard vessels remain one of the biggest safety issues for the shipping industry, as highlighted by the recent incident on the car carrier Fremantle Highway, which caught fire last week off the Dutch coast.
Allianz’s Safety and Shipping Review 2023 report states that fire was the second-most often cause for the loss of shipping vessels last year (after foundering) with eight lost and more than 200 incidents reported – the highest for a decade. Captain Rahul Khanna, global head of marine risk consulting at Allianz Commercial, highlighted some of the factors behind this trend.
“Although shipping losses have declined by 65 percent over the past decade (38 vessels in 2022 compared with over 100 in 2013), unfortunately fire incidents have not followed,” he said. “We continue to see major events involving large container ships, car carriers and ro-ro vessels for example. There were over 200 reported fire incidents during 2022 alone (209) – the highest total for a decade. Meanwhile, 64 ships have been lost to fires in the past five years. AGCS analysis of 250,000 marine insurance industry claims shows fire is also the most expensive cause of loss, accounting for 18 percent of the value of all claims analysed.”
He explained that fires need to be contained quickly, yet it may take several hours to get to the base of a fire on a large vessel, the size and design of which makes fire detection and fighting more challenging. Once the crew has abandoned ship the emergency response and salvage operations become more complex and expensive, and the risk of total loss increases.
“Misdeclaration of cargo is a real problem. Industry reporting systems attribute around 25 percent of all serious incidents onboard container ships to mis-declared dangerous goods, such as chemicals, batteries, and charcoal, although many believe this number to be higher,” Khanna added. “Failure to properly declare, document and pack hazardous cargo can contribute to blazes or hamper firefighting efforts. Labelling cargo as dangerous is more expensive. Therefore, some companies try to circumvent this by labelling fireworks as toys or lithium-ion batteries as computer parts, for example.”
Lithium-ion batteries, either transported as cargo or as part of an electric vehicle (EV), are moved safely every day. They do not necessarily burn more frequently than other goods. It is only when they ignite that they are more difficult to extinguish as they can burn more ferociously and are capable of spontaneously reigniting hours or even days after they have been put out. “Most ships lack the suitable fire protection, firefighting capabilities, and detection systems to tackle such fires at sea, which has been made more difficult by the dramatic increase in ship size – container-carrying capacity has doubled in the last 20 years. We have seen many fires where malfunctioning or damaged batteries have been attributed as a contributing factor in recent years,” he warned.
He said that the risk of such fire will decrease over time as manufacturers, carriers, and regulators address the current challenges. In the meantime, attention must be focused on pre-emptive measures to help mitigate the peril. Action is needed, given that Mckinsey, an industry analyst, expects the global lithium-ion battery market to grow by over 30 percent annually from 2022 to 2030.
“State of charge (SOC) of lithium-Ion batteries is an important consideration in their safe transportation and should be around 30-50 percent. More towards 30 than 50. Both shipping lines and shippers should ensure this is the case. Shippers should also request proper certification like the test summary from the manufacturers before transporting them as defective manufacturing is a one of the leading causes of fires in such batteries,” Khanna said. “Other measures to consider include ensuring staff/crew receive adequate training and access to appropriate firefighting equipment, improving early detection systems and developing hazard control and emergency plans.”
Moreover, he said that several large container shipping companies have turned to technology to address this issue of misdeclaration using cargo screening software to detect suspicious bookings and cargo details. Some large container operators are imposing penalties, although unified requirements and penalties for mis-declared hazardous cargo would be welcomed.
“The debate about EVs in the shipping industry is ongoing, with conversations about whether there is a need for dedicated ro-ro vessels for EVs. From an insurance perspective, this is something we would like to see – purpose-built vessels for transporting EVs, designed to substantially reduce the risk of fire. We have already seen shipping companies stop transporting EVs on their ships because of the potential fire risk,” he added.
