About the Author: Captain Rahul Khanna is Global Head of Marine Risk Consulting at Allianz Global Corporate & Specialty. A marine professional with 26 years of experience within the Shipping and Maritime industry, Captain Khanna served more than 14 years on board merchant ships in all ranks, including Master of large oil tankers trading worldwide. Although shipping losses have more than halved over the past decade fires on board vessels remain among the biggest safety issues for the maritime industry. AGCS analysis of over 240,000 marine insurance industry claims between January 1, 2017, and December 31, 2021, worth approximately €9.2bn in value, shows that these are the most expensive cause of loss, accounting for 18% of the value of all claims.
As recent events have demonstrated, roll-on roll-off (ro-ro) car carriers, the largest of which can hold as many as 8,000 vehicles, can be susceptible to fire risks while there have also been a number of blazes on container ships.
In March 2022, the fire and subsequent sinking of the ro-ro carrier Felicity Ace with the loss of some 4,000 vehicles, put the risks associated with transporting electric vehicles (EVs), and the lithium-ion (Li-ion) batteries that help power them, firmly in the spotlight. The exact cause of the fire may never be known, but it is thought the presence of Li-ion batteries on board aggravated the fire conditions. Given the growing popularity of EVs means many more vehicles with Li-ion batteries will be transported by sea in future – together with the fact that this was not an isolated incident – it is crucial that the maritime industry focuses on loss prevention best practice.
Insurers have long warned about the potential dangers that lithium-ion batteries can pose for the shipping and wider logistics industries, whether they are being transported inside electric vehicles or as standalone cargo, if they are not handled, stored or transported correctly, with fire being a significant hazard.
Batteries are not only a potential cause of fire if damaged, overcharged or subjected to high temperatures, they can also aggravate other causes of fire at sea and are difficult to extinguish as they have the potential to reignite days or even weeks later. Safe carriage has become an emerging risk concern for the shipping community, raising questions about the adequacy of fire detection and firefighting capabilities on board vessels, cargo loading procedures and even whether changes in vessel design may be necessary, given specialist equipment is required to extinguish any blazes and salvage operations at sea can be challenging.
Hazards and causes
A new risk bulletin from AGCS: Lithium-ion batteries: Fire risks and loss prevention measures in shipping highlights four main hazards: fire (Li-ion batteries contain electrolyte, an ignitable liquid); explosion (resulting from the release of ignitable vapor/gases in a confined space); thermal runaway (a rapid self-heating fire that can cause an explosion); and the toxic gases that these hazards can produce. The most common causes of these hazards are substandard manufacturing of battery cells/devices; over-charging of the battery cells; over-temperature by short circuiting, and damaged battery cells or devices, which, among other causes, can result from poor packing and handling or cargo shift in rough seas if not adequately secured.
In most shipboard incidents a thermal runaway event can be a significant possibility unless immediate action is taken by the crew, such as suppressing a fire with copious amounts of water over a long period of time. However, this can be extremely challenging due to factors such as early detection being difficult, a shortage of crew members, and a lack of adequate firefighting capabilities on board.
Therefore, the primary focus must be on loss prevention and in the bulletin Allianz marine risk consultants highlight a number of risk mitigation measures for stakeholders through the supply chain to consider, including recommendations for shipping Li-ion batteries installed in EVs and as standalone cargo, as well as steps that can be taken to ensure safe storage in warehouses.
Electric vehicles on car carriers and within freight containers
While EVs are inherently safe, they do represent a significant difference in risk profile for shippers when compared with traditional vehicles and transporting them may represent an enhanced risk for the maritime industry, at least in the near-term. To mitigate the fire risks that can potentially result from Li-ion batteries during the transportation of EVs on car carriers and within freight containers, the bulletin highlights a number of recommendations including:
Safety steps for storage
The bulletin also highlights a number of loss prevention measures that can help ensure safe storage of Li-ion batteries in warehouses, noting that large-format batteries, such as those used in EVs, ignite more quickly in a warehouse fire than small format batteries used in smartphones, laptops and power tools. Recommendations include:
If the maritime industry is to improve its incident record related to the transportation of lithium-ion batteries, then all parties involved must understand the hazards involved, the most common causes and the problems associated with transporting in commerce. Only through a concerted effort by stakeholders in the supply chain can the industry hope to reduce the rate of incidents.