SCHIFFFAHRT | SHIPPING Cargo fires in focus of insurers Time and again, serious fires occur on ships, be it container vessels or car carriers for example – not least to the chagrin of insurers. Calls and appeals from the market for more fire protection and better regulation are growing louder again One of the most severe fire disasters will remain in the memory of the local shipping industry for a long time: The »MSC Flaminia« case from 2012 © Havariekommando 28 <strong>HANSA</strong> – International Maritime Journal <strong>02</strong> | 2<strong>02</strong>3
SCHIFFFAHRT | SHIPPING Fire and explosion incidents cause the most expensive insurance claims in the marine industry, while at a time of rising exposures and inflation, cargo damage is the most frequent cause of loss, according to the recently published report of Allianz Global Corporate & Specialty (AGCS). The marine and cargo insurer analyzed more than 240,000 marine insurance industry claims worldwide between January 2017 and December 2<strong>02</strong>1, worth approximately 9.2 bn € in value. »The number of fires on board large vessels has increased significantly in recent years, with a string of incidents involving cargo, which can easily lead to the total loss of a vessel or environmental damage,« said Régis Broudin, Global Head of Marine Claims at AGCS. Fires accounted for 18 % of the value of marine claims analyzed (equivalent to around 1.65 bn €) compared with 13 % for a five-year period ending July 2018. A contributing factor to this increase of fire risk on board vessels is often misdeclared/non-declaration (of) dangerous cargos, while a recent increase in engine room fires may reveal some underlying risk around crew competencies. The potential dangers that the transportation of lithium-ion batteries on vessels pose only add to these concerns, with AGCS having already seen a number of incidents. The development is causing more and more anger and incomprehension in the insurance industry. For some time now, there have been various attempts to improve the safety framework conditions in shipping. Towards the end of last year, the TT Club finally made a new push. TT Club is an independent provider of mutual insurance and related risk management services to the international transport and logistics industry. Founded in 1968, the Club has more than 1,100 Members, spanning container owners and operators, ports and terminals, and logistics companies, working across maritime, road, rail, and air. In a message to the market, it says »TT Club is continuing its battle to convince cargo interests, supply chain professionals and enforcement agencies that the responsibility for mitigating container ship fires is shared by numerous entities involved from end to end of the entire global supply chain.« With its estimated sixty-day average occurrence of serious fires being maintained by the »Zim Charleston« fire in August and the »TSS Pearl« in the Red Sea in early October, TT urged a more comprehensive approach to arresting the trend. »There were significant lessons coming from the sad incident on the ›MSC Flaminia‹, which cost the lives of three seafarers, particularly from the subsequent legal proceedings that adjudged the shipper and NVOC responsible for root cause errors,« said TT’s Peregrine Storrs- Fox. »Despite the biennial updates to the IMDG Code, including multiple arising »We are continuing our battle to convince cargo interests, supply chain professionals and enforcement agencies that the responsibility for mitigating container ship fires is shared by numerous entities involved from end to end of the entire supply chain« Statement of TT Club from this particular incident, the judge’s assessment that the regulations merely set the ›baseline‹ for good practice remains utterly true today.« According to the TT Club, ensuring compliance with the latest mandatorily applicable version of the IMDG Code is essential as a minimum standard for all those shipping dangerous goods by sea. But the liability judgement in the »MSC Flaminia« case made it clear that regulations merely set the baseline. »This is an important statement to which any entity inclined to rely solely on the letter of the law when consigning dangerous goods, would do very well to pay heed,« commented Storrs-Fox. TT advocates a comprehensive approach, striving to bring an understanding of all the factors contributing to these fires to everyone involved in the movement of cargo in containers and therefore underlining their responsibilities for safety. Errors, misunderstandings, misdeclarations and inadequate packing and securing are described as lying at the heart of many significant incidents, both at sea and in storage facilities. Movement of cargo is initiated in the trading of goods – sellers and buyers – who instruct packers and whoever becomes the shipper. »They have a duty of care as much as the packers, warehouse operators, forwarders, logistics companies, carriers of all modal types, cargo handlers and terminal operators. Attention to accurate classification and declaration are critical to improve certainty of outcome from end to end. This requires truth as much as awareness of regulations and sound safety practices.« Along with its sister insurer, the UK P&I Club, TT Club has recently updated its guideline publication, »Book it Right, Pack it Tight«. It is intended to provide key insights for all involved in dangerous goods’ shipments, including a clear ex- Top causes of loss by value of claims in marine © AGCS <strong>HANSA</strong> – International Maritime Journal <strong>02</strong> | 2<strong>02</strong>3 29
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