A combination of factors is increasing the risk of blazes at sea and on land, reads an Allianz report.
Decarbonization and cargo fires
Hazardous and combustible goods are increasingly transported by containers, while the prevalence of Lithium-ion (Li-ion) batteries poses a growing risk for both container shipping and car carrier vessels. At the same time, these hazardous cargos are increasingly transported by large vessels, where the consequences of fires are amplified, resulting in more severe losses and longer delays.
“Decarbonization is leading to new types of cargo, some more hazardous than in the past, such as electric scooters and battery-powered goods,” says Captain Rahul Khanna, Global Head of Marine Risk Consulting at Allianz Global Corporate & Specialty (AGCS).
“A lot of conventional power sources have been replaced by batteries, and that industry has seen huge increases in demand in recent years, a trend that will only continue. These new cargos mean new risks,” says Khanna.
Fire is one of the the biggest causes of general average claims on container vessels, and one of the main causes of total losses across all vessel types with 64 ships lost in the past five years alone. With upwards of 20,000 containers on board some vessels, the risk of a fire originating from a container increase, while detecting and fighting a fire at sea is particularly difficult for a crew of just 20 to 30 people, according to Marcel Ackermann, Global Project Leader Cargo at AGCS. A small container fire can easily take hold and overwhelm the ability of crew to deal with the situation, leading to the abandonment of the vessel, and potentially its loss.
Recent incidents include the ZIM Charleston fire in August 2022, in which some 300 containers were reportedly damaged. This was followed by the TSS Pearl in the Red Sea in October 2022, which sank after the crew were forced to abandon ship. There have also been several fires at ports and warehouses, including the 2022 fire and explosion at a container depot in Chittagong, Bangladesh, which killed 40 people.
“General average has a significant impact on cargo customers because if it occurs, the time it takes to release cargo is exponentially longer on a large container vessel, which has implications for supply chains and seasonal cargo,” says Ackermann.
“When we look at significant general average incidents involving container vessels over the past five years, they are largely related to fires. General average risk these days comes down to fire, and the majority of these incidents are related to mis-declaration of cargo.”
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