Guest blog of the week – by Mark Lerche
Lower vessel utilization but not less fires
The maritime insurance industry experiences overall a fairly stable level in the claims environment in general. But the amount of maritime fires is on the rise and of growing concern to the industry according to the International Union of Marine Insurance (IUMI). Large fires on cargo vessels remain an issue in spite of the overall reduced vessel utilization due to Covid-19 in 2020. The major on-board fires are particularly problematic onboard container vessels. Box shipping hasn’t been hit by the lower utilization compared to commodity trades during the global pandemic.
Fires in figures
According to Allianz’ 2019 Safety & Shipping Review 13% of the maritime claims value overall (including total loss) is due to fires and explosions and it has been estimated in the industry that container fires represent costs of approx. USD 500 mio. annually.
Container fires can be hard to detect and difficult to fight if the burning container is stowed high and far from the lashing bridge. According to company HydroPen, who delivers solutions to extinguish container fires on board and Guard – the largest P&I Club and the second largest marine insurer in the world – these fires happen on average every 1-2 month and some 25-30% of cargo claims costs are fire related.
The recent decades increase in size and complexity of containerships is only increasing the challenge of container fires. Based on OECD’s cargo figures it is suggested that the scale of modern 22,000 TEU vessels increases the risk of having a container fire onboard with a factor 4!
First aid reaction
The first priority is naturally to stop the fire in as safe a manner as possible to reduce the risk to the seafarers. Secondly to reduce damage to the cargo in the container and the goods and equipment surrounding the fire. Insurance and forensic – and with this the question of responsibility – then follows the actual fire damage.
Responsibility identification can be an economical and administrative battel in its own, but clean-up is of utmost importance to ensure no consequential damages occur to other cargoes and equipment. Delay in the proper actions to save equipment and cargo can have sever financial consequences. Contaminations from the fire and water damages speeds up corrosion and the risk of consequential damages to surrounding equipment and cargo. Therefore, timely and correct ‘first aid’ to damaged goods and equipment can reduce the final costs of losses and time of recovery. Also related to production lines and companies awaiting the affected goods.
Therefore, get up to speed on your guidelines for restoration of electrical systems, machinery and goods in case of fire, water and extinguishing agents to reduce the damages as much as possible when the damages occur.
Find guidelines here: http://rules.dnvgl.com/docs/pdf/gl/maritimerules/gl_vi-8-5_e.pdfThis article is shared by courtesy of Mark Lerche, Nordic Regional Sales Manager, AREPA.