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Focus should be on loss prevention to tackle risk of battery fires in shipping: Allianz

5th September 2022 - Author: Kassandra Jimenez-Sanchez

With lithium-ion (Li-ion) batteries having an increasing impact on shipping safety, prevention measures are crucial to tackle the risk of battery fires in vessels, according to a new risk bulletin from marine insurer Allianz Global Corporate & Specialty (AGCS).

Marine shipping reinsuranceAn AGCS analysis of over 240,000 marine insurance industry claims over the past five years (with a value of €9.2bn), showed that fire/explosion (from all causes) is the most expensive cause of loss, accounting for 18% of the value of all claims.

The new report highlighted the main hazards and causes of fire if Li-ion batteries in electric vehicles (EVs) or cargo are not stored, handled or transported correctly following a number of incidents on vessels, such as roll-on roll-off (ro-ro) car carriers and container ships

Captain Rahul Khanna, Global Head of Marine Risk Consulting at AGCS, commented: “Shipping losses may have more than halved over the past decade but fires on board vessels remain among the biggest safety issues for the industry. The potential dangers that the transportation of lithium-ion batteries pose if they are not stored or handled correctly only add to these concerns, and we have already seen a number of incidents.

“Companies should do all that they possibly can to implement, develop and follow robust loss prevention measures, given the growing popularity of electric vehicles means many more vehicles with lithium-ion batteries will be transported by sea in future.”

Stratumn, by SIA Partners

AGCS highlighted four main hazards, which include fire, as the electrolyte, a liquid contained in Li-ion batteries could ignite; explosion, which can result 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.

According to the insurer, 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.

As Khanna highlighted, the primary focus must be prevention measures. In the report AGCS experts shared a number of recommendations for companies to consider, focusing on two areas in particular: storage and in transit.

These measures include ensuring staff/crew receive adequate training in handling and packing, as well as access to appropriate firefighting equipment; improving early detection systems and developing hazard control and emergency plans.

Captain Randall Lund, Senior Marine Risk Consultant at AGCS, said: “If the maritime industry is to improve its incident record related to the transportation of lithium-ion batteries all parties involved in the supply chain must understand the hazards involved, the most common causes and the problems associated with transporting in commerce.

“Regulations and guidance are specific in addressing these batteries to help prevent most incidents, but these can only be effective if they are communicated and enforced. Only through a concerted effort by stakeholders in the supply chain can we hope to reduce the rate of incidents.”

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