All at sea: challenges facing the maritime industry

28th September 2023

With 90% of the world’s goods transported by ship, the maritime industry is confronting major challenges to safety and supply. Huw Morris reports

As maritime mysteries go, it may not be in the class of the Mary Celeste. Nevertheless, the fate of the Felicity Ace is furrowing the brows of marine accident investigators.

In February last year, the 200-metre cargo ship embarked from Emden, Germany, and headed for Rhode Island, US, with nearly 4,000 cars on board, including Audis, Bentleys, Lamborghinis and Porsches, as well as a sizeable contingent of electric cars. She was around 320km south of the Azores when the cargo section caught fire.

All 22 crew abandoned ship and were rescued, but the vessel drifted ablaze for about a week before a salvage team was able to board and connect her to a tug. Despite this, the Felicity Ace capsized and sank on 1 March with an estimated cargo loss of up to $400m (£315.4m). That is without considering the collateral damage of the 2,000 tons each of oil and fuel she was carrying.

The shipping forecast

The Felicity Ace was one of 38 ships to sink last year, according to Allianz Global Corporate and Specialty (AGCS), a major business insurer. But her fate highlights growing concerns for shipping companies and supply chain managers about an emerging risk from the global drive towards decarbonisation.

According to AGCS, there were 209 fires reported on major ships in 2022. This is the highest number for a decade, up 17% year-on-year. Fire and explosions are also the most expensive incidents, accounting for 18% of the value of insurance claims in the marine industry and totalling around €1.65bn (£1.41bn).

Electric vehicles (EVs) and battery-powered goods are a relatively new type of cargo. Indeed, the burgeoning battery market is expected to grow by more than 30% annually over the next decade. Most EV makers rely on lithium-ion (Li-ion) batteries, which are potentially highly flammable and in danger of ‘thermal runaway’ – a phenomenon which independent safety science organisation UL Research Institutes describes as “an uncontrollable self-heating state”. AGCS warns they pose an increasing risk for container shipping and car carriers.

“Li-ion batteries can store up to four times more energy per unit of mass than other batteries, with potential fire or explosion risks increasing as the amount of energy stored by the battery increases,” says John Gow, a marine fire and explosions investigator who is technical director at fire protection engineering firm Jensen Hughes. “Large-format Li-ion batteries, such as those used in EVs, may tend to catch fire more quickly than smaller, encased Li-ion batteries used in smartphones, laptops and power tools.

“Common causes of Li-ion battery fires may be related to internal manufacturing defects, physical damage or substandard quality, internal electrical failure such as overcharge, over-discharge and short circuits, and thermal runaway issues.

“Li-ion battery fires can also be more difficult to manage and extinguish than normal fires. Li-ion battery fires are intense, can produce a significant amount of toxic gases – usually early in the failure – and have the potential to reignite hours, days or weeks later.

“Typically, a ship’s firefighting capabilities and fire protection and detection systems are not designed to deal with Li-ion fires. Once a fire takes hold, it can easily get out of control, spreading beyond the ability of the crew or fire protection systems to manage.”

Battling the blazes

CED Technologies, which specialises in forensic engineering, says firefighters are struggling to keep up with the rate at which the EV industry is changing. Moreover, different tactics are required to combat these blazes. For example, Li-ion battery cells are contained in steel cases to protect them and help maintain their temperature. But in the event of fire, this also causes them to be harder to put out, forcing firefighters to place extinguishing agents underneath the battery.

It adds that “so far the jury is out” on whether EV Li-ion batteries led to the sinking of the Felicity Ace. “A full investigation would need to be completed and the evidence is unfortunately residing at a depth of more than 30,000ft on the bottom of the Atlantic Ocean,” the company says.

Shipping’s role in the world economy

The maritime industry is a powerful but overlooked player in the global economy. The Organisation for Economic Co-operation and Development (OECD) says ships transport around 90% of the world’s goods. Around 60% of that – including virtually all imported fruits, gadgets and appliances – are packed into large steel containers, according to the World Economic Forum. The rest is mainly commodities such as oil or grains poured directly into the hull. Maritime trade volumes are expected to triple by 2050, according to the OECD.

The average size of a container ship has doubled in the past two decades, with the largest vessels now behemoths and capable of hauling 24,000 containers. That’s a carrying capacity equivalent to a 44-mile-long freight train, according to leading international owner Costamare.

The combined value of the global merchant fleet increased 26% to $1.2trn (£0.95trn) in 2021 while the average value of container shipments has also risen, with more high-value goods such as electronics and pharmaceuticals. AGCS says “it is not unusual” to see one container valued at $50m (£39.4m) or more for high-value pharmaceuticals.

How shipping giants are responding to fires at sea

More than 70 fires ignited on board container ships in the past five years, according to AGCS, with car carriers transporting electric vehicles using Li-ion batteries the main headache.

In a major new initiative, Evergreen Line of Taiwan, South Korea’s HMM, Denmark’s Maersk, Germany’s Offen Group, Singapore’s Ocean Network Express, Hong Kong’s Seaspan as well as UK certifier Lloyd’s Register are backing extensive investigations into how cargo is loaded, secured and monitored at sea as well as faster technology for detecting fires onboard and extinguishing them quickly.

“The main root cause for cargo fires on container ships is the integrity of dangerous goods throughout the supply chain,” says Maersk’s head of marine standards, Aslak Ross. “It is a problem that can only be improved through industry-wide solutions and we are a strong believer in sharing learning across the industry to improve safety.”

Global shipping losses in 2022

Every year, AGCS analyses reported shipping losses and casualties – known as incidents – involving ships of more than 100 gross tons. Sunk or submerged ships were the main cause of loss, followed by fire and explosions, with vessel collisions coming third.

A total of 38 ships were lost in 2022, compared with 59 the year before. This is a 65% decline in annual losses over 10 years. Even 30 years ago, the global fleet was losing more than 200 vessels annually.

South China, Indochina, Indonesia and the Philippines maritime region is the global hotspot, accounting for one in five losses in 2022, and totalling 204 in the past decade. High levels of trade, congested ports, older fleets and extreme weather are the main causes for losses in the region.

According to AGCS’ global head of marine risk, Rahul Khanna, shipping losses are at their lowest in the 12 years that AGCS has been studying the issue. Improvements in safety programmes, training, changes in ship design and regulation are working, he says, but there are “several clouds on the horizon”. Li-ion batteries are not the only disruptive factor causing waves.

Some 18 months after Russia’s invasion of Ukraine, the ripple effects for shipping continue to be felt. The threat of collateral damage on civilian shipping in or around the war risk area remains high, particularly from floating mines. Oil sanctions have also resulted in Russia and its allies creating a ‘shadow’ tanker fleet to transport and sell its oil. Estimates of its size vary but the figure could be as high as 600 vessels.

“The shadow fleet is more likely to be made up of older ships, operating under flags of convenience with lower maintenance standards,” says AGCS’ global product leader of marine hull, Justus Heinrich. “The increase in their number is a worrying development, threatening the world fleet and the environment. A major incident can cause loss of life as well as uninsured damage or pollution.” Indeed, last May, an uninsured, unladen 1997-built tanker, Pablo, exploded in South-East Asia, reportedly killing crew.

Industry reporting systems attribute around 25% of serious incidents onboard container ships to misdeclared dangerous goods, such as chemicals, batteries and charcoal, although many believe this number to be higher.

“Failure to properly declare, document and pack hazardous cargo can contribute to blazes or hamper firefighting efforts,” says Khanna. “Labelling a cargo as dangerous is more expensive. Therefore, some companies try to circumvent this by labelling fireworks as toys or Li-ion batteries as computer parts, for example.”

Several large container shipping companies have turned to technology by using cargo-screening software to detect suspicious bookings and cargo details, while large container operators are imposing penalties. However, Khanna calls for unified requirements and penalties for misdeclared hazardous cargo as a crucial step in tackling the issue.

Huw Morris is a freelance journalist

Image credit: Getty Images


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