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Fire on vessel tops safety concern, as claims rise

Fire on vessel tops safety concern, as claims rise

Fires on vessels have become one of the biggest safety issues for the shipping industry as evidenced by a significant increase in recent incidents, and also a growing impact on insurance claims.

Allianz’s Safety and Shipping Review 2023 reports that fire was the second top cause of loss for shipping vessels last year, with eight vessels lost and more than 200 incidents reported, the highest for a decade.

The latest was Fremantle Highway, a car-carrying vessel, which caught fire off the Dutch coast with thousands of vehicles on board en route from Germany to Egypt.

Captain Rahul Khanna, global head of Marine Risk Consulting at AGCS said 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.

We continue to see major events involving large container ships, car carriers and ro-ro vessels, for example, he said.

According to him, 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 analyzed.

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Catastrophic fires on large vessels typically begin with combustible cargo, which then spreads rapidly and outpaces the firefighting capabilities of the crew. The size and design of large vessels make fire detection and fighting more challenging and once crew are forced to abandon ship, emergency response and salvage operations become more complex and expensive, and the risk of a major or total loss increases. Fires need to be contained quickly, yet it may take several hours to get to the base of a fire on a large vessel.

Khanna, as already mentioned, misdeclaration of cargo is a leading cause of fires on container ships and shippers or freight forwarders should ensure goods are properly declared and marked as hazardous if Li-Ion batteries are being shipped.

Several large container shipping companies have turned to technology to address this issue using cargo screening software to detect suspicious bookings and cargo details, while large container operators are imposing penalties. Unified requirements and penalties for mis-declared hazardous cargo would be welcomed, he said.

From an insurance perspective, this is something we would like to see, a purpose-built vessel for transporting EVs, designed to substantially reduce the risk of fire.