Fire claims increased remarkably last year. Over the last years shipping losses have declined drastically. However, fires at sea is a very significant uptrader in the financial losses in the global shipping industry. In this article, we dive deeper into the root causes of this increase and how a collaborative approach between shipping companies, product manufacturers and insurers can mitigate the risks and losses.
Fires at sea as a result of electric vehicles?
The global shipping industry plays a critical role in transporting goods and commodities across vast distances. Fueling economies and enabling trade. One of the trends over the past years is the enormous increase of electric vehicles (EVs) that are produced worldwide. And so does the transportation of their essential components, including lithium batteries.
This upswing in shipping lithium batteries has introduced a pressing concern for the marine insurance sector. Multiple reports show that the increase of shipping lithium batteries is the main cause of increased fire claims in the shipping industry.
Lithium battery transportation causing fires at sea
Lithium batteries are at the heart of the revolution in electric vehicles. Nowadays, these batteries offer higher energy density and longer driving ranges than before. While lithium batteries are crucial for sustainable mobility solutions, lithium batteries also come with inherent fire risks.
The lithium batteries are being shipped to various destinations across the world, driving the demand for maritime transportation. Issues like improper packaging, mishandling the batteries during transportation and thermal runaway can trigger fires to cause.
Shipping losses and fire claims on the rise
The growth in fire incidents caused by shipping lithium batteries has significant consequences for the marine insurance sector. Insurers are grappling with the challenge of accurately assessing the heightened risks associated with these sensitive cargo items.
As fire incidents can lead to substantial financial losses and potential environmental damage, insurance claims related to lithium battery shipments are becoming increasingly common. This trend necessitates a collaborative effort to address the root causes of these incidents.
Collaborative solutions for loss prevention in fires at sea
Also in this case, and we keep saying this, the best growth is towards each other. In mitigating the shipping losses, the claims and incidents caused by fire at sea, the manufacturer of the product, the shipping companies and insurers need to work together.
Manufacturers and shipping companies need to establish strict packaging standards, properly designed and tested to reduce the risk of fire during transportation over sea. And advanced monitoring systems should be used to track temperature, voltage, and other critical parameters of lithium battery shipments. To detect potential issues as early as possible in order to allow timely intervention.
Shipping companies and all logistic partners included in the shipping procedure need comprehensive training and education in handling lithium batteries. This includes understanding proper loading, stowage, and firefighting protocols to minimize fire risks. And when fire appears, emergency response plans should outline the procedures to minimize the damages and risks caused by the fire.
Manage prevention measures together
If fire claims from electric cars are on the rise, it is probably not because the marine perils have changed, but that these claims originate from operational discrepancies in the handling and contracting of these transportations. This is exactly where IMU is at your service, because prevention measures must collectively be managed with knowledge from both the commercial/operational side as the legal and insurance side.
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