Cargo Workshop: Container Ship Fires

Introduction to Panelists

• Matthew O’Sullivan, Head of Motor & Marine for Zurich Australia• Based in Sydney

• Member of Global Marine Leadership team for Zurich

• Chairman of ICA Marine Standing Committee

• Sundeep Khera, Head of Marine APAC for AXA XL• Based in Singapore

• Master Mariner

• Holds MBA from University of Chicago

• Joern Groninger, Average Adjuster with Groninger Welke Janssen• Based in Bremen

• 5th generation average adjuster

• President of both German and Int. Assoc of Average Adjusters (AMD)

• Ian Lennard, President of National Cargo Bureau• Based in New York

• Qualified Lawyer

• Serves on the Council of Trustees of the United Seaman’s Service

How hazardous is a containership fire ?

• A fire broke out onboard the

‘KMTC Hong Kong’ while

berthed at Thailand’s

eastern Laem Chabang port

• At least 228 people were

rushed to hospital with burns,

eye irritation and breathing

difficulties.

25th May 2019

• The cause of fire was due to

mis-declared chemical cargoes

of calcium hypochlorite and

chlorinated paraffin wax

• The fire triggered an 18-hour

firefighting operation to

extinguish the blaze.Data source : Bankgok Post Newspaper published date 02nd June 2019

Video file source : Marine crew onboard vessel passing the port of Laem Chabang

How hazardous is a containership fire ?

• A fire broke out onboard the

‘KMTC Hong Kong’ while

berthed at Thailand’s

eastern Laem Chabang port

• At least 228 people were

rushed to hospital with burns,

eye irritation and breathing

difficulties.

25th May 2019

• The cause of fire was due to

mis-declared chemical cargoes

of calcium hypochlorite and

chlorinated paraffin wax

• The fire triggered an 18-hour

firefighting operation to

extinguish the blaze.Data source : Bankgok Post Newspaper published date 02nd June 2019

Video file source : Marine crew onboard vessel passing the port of Laem Chabang

Evolution of containerships , DG carriage & crew onboard

500

30

0 200 400 600

Approximate number of DG containers on board

Container vessels

23

25

22.5

23

23.5

24

24.5

25

Number of Crew onboard

Data source : Presenters past experience at sea and container stowage planning and varies on the trade lane of the vessels

X 42 timesVessel capacity increaseVLCS – Very Large Container Ship

ULCS – Ultra Large Container Ship

X 17 timesDangerous goods containers onboard

increased

- 8 % Crew manning levels

Image citation : Containership types , Author :Jean-Paul Rodrigue Ph.D , The Geography of Transport Systems Third Edition

Fires on board Containerships & Con-Ro vessel’s

MSC Flamina

Eugene Maersk

Hansa Brandenburg

Hyundai Fortune

APL Austria

MSC Daniela

Maersk Honam

Sincerity Ace

Yantian Express

APL Vancouver

ER Kobe

Grande America

Grande EuropaKMTC Hong Kong

Diamond Highway

APL Le Harve

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

-500 0 500 1000 1500 2000 2500 3000 3500

Ca

pa

cit

y o

f ve

sse

l(TE

U1/V

eh

icle

ca

pa

cit

y)

Number of days between vessel fire incidents

Fires onboard Containerships and Ro-Ro vessels(2012 – Aug 2019)

2012 2013 2016 2017 2018 2019

25 daysAverage number of days between 5 containership fire

incidents in 2019 (Jan-Aug)

2018 & 2019

2 VLCS & ULCS fires

US$415m 2

Approximate insured value (H&M and Cargo) Maersk Honam (ULCS2)

US$1.2 B/Year 1

Additional freight revenue for shipping companies carrying

Dangerous goods containers

3 ULCS fires x US$415m/ea ≈ US$1.2B/Year

400% increase In frequency of fires onboard containerships 2018 – 2019(Jan-Aug)

Data sources :

1. ICHCA - International Cargo Handling Coordination Association estimates 6million shipments of

Dangerous goods per annum in 2018 x an estimated US$ 200/shipment additional freight revenue for

each Dangerous goods shipment.

2. WKW estimate of H & M value to be US$ 110 million & Cargo value to be US$305 million

Vehicle carrier or Con-Ro vessel

Data credit :1Twenty foot Equivalent Units2ULCS – Ultra Large Container Ship

Typical Risk Zone set up on Container vessels

Low Risk High Risk

Image citation :

20,000 T.E.U* vessel load planning using A.IThis video shows a

container vessel stowage

planner using an Auto

planning software for the

purpose of ;

1. Risk Zone Selection

2. Stowage Criteria

Selection

3. Auto Stowage Planning

Look at the

bays/row/tiers being

loaded with

containers by an AI

Video citation :

Time taken for stowage

planning of a 20kTEU*

vessel ≈ 24min vs a few

hours in the past when

done manually* Twenty foot Equivalent Units

Questions: Do you see any developments in the container shipping industry that will help to alleviate the problems we are facing with Fires?

How prevalent is mis-declaration and wrongful stowage and the incorrect use of containers as causes of large container ship fires?

Recent developments - Ian

• Quantify the Problem

• Line Imposed Fines on Mis-declared

• Risk Based Stowage

• Cargo Screening Tool– Detects Potential Mis and Undeclared Cargo

Inspection Results

DG Total Failed Failure

rate

Failed

Securing

Failed

placards/mks

Failed Docs/

Misdeclared

DG Imports 158 109 69% 69 (44%) 61 (39%) 12 (8%)

DG Exports 105 40 38% 26 (25%) 16 (15%) 5 (5%)

Non DG Total Failed

Securing

Failure rate

Non DG Imports 187 96 51%

Non DG Exports 50 29 58%

Grand total Failed Failure rate Failed Securing

500 274 55% 217 (43%)

Results by regional load port

DG Non DG

Region # of

Inspections

Passed Failed %

Failed

USA

(Export)

105 65 40 38

Latin

America

28 5 23 82

Europe 9 4 5 56

India 45 6 39 87

Asia 68 34 34 50

Middle

East

8 0 8 100

Total 263 114 149 57

Region # of

Inspections

Passed Failed %

Failed

USA

(Export)

50 21 29 58

Latin

America

26 17 9 35

Europe 61 28 33 54

India 31 15 16 52

Asia 62 27 35 56

Middle

East

6 4 2 33

Australia 1 0 1 100

Total 237 112 125 53

# of

Inspections

Passed Failed %

Failed

105 65 40 38

U.S. DG EXPORTS

*NCB Container Inspections performed in the normal course of business failed at a 7.4% rate as compared to the initiative failure rate of 38% for DG export boxes from the US.

Line Imposed Fines on Misdeclaration

• Hapag Lloyd - $15,000

• Hyundai (HMM) - $15,000

• Evergreen - $35,000

• Maersk – unspecified

• OOCL – unspecified

• Symbolic or does it actually have teeth?

Risked Based Stowage of Dangerous Goods

• Participants in the Working Group

• Cargo Incident Notification System (CINS)

• Classification Societies – ABS, CCS and Lloyd’s Register

• Danish Maritime Authority

• International Group of P&I Clubs

• TT Club

• Exis Technologies

• National Cargo Bureau

Risked Based Stowage of Dangerous Goods

• Goals• Protect Life – No DG adjacent to accommodations

• Retain Main Propulsion – No DG near engine room

• Retain Structural Integrity - Avoid fire-prone DG under deck that cannot be extinguished by CO2

• Facilitate Fire Prevention - Segregate fire-prone DG from known ignition sources, protect from direct sunlight

• Facilitate Firefighting - Self-reacting commodities (including exempt DG) should be stowed in accessible positions and separated from fast-reacting commodities

• Facilitate Safety - The presence of mis-declared and undeclared Dangerous Goods should be taken into consideration

Cargo Screening Tool

• Scans a booking searching for un-declared or mis-declared DG –How does it work? Scans booking for:

• Declaration similar to DG (e.g. bleaching powder, water treatment compound, lime chloride)

• Documentation is incomplete

• New cargo or route for a shipper

• There is no Harmonized System (HS) code

• New customer

• Late booking

• Change of documentation

• Bill of lading discrepancy

Recent developments - Joern

Ashore:

• - IMDG Code – but lack of controls

• (Verified Gross Mass not controlled either)

• - remove incentives for misdeclaration?

On board:

• Container Ship Safety Forum (www.cssf.global)

• "members intensely discussed firefighting on containerships… are presently testing new firefighting equipment and will share their experience"

Question:How do other segments of the shipping industry, such as Average adjusters or Salvors view this issue?

Salvors’ Practical problems - Joern

• mix of numerous unknown different substances on fire

• mobilizing suitable material to possibly remote locations

• vessel dimensions (beam > 60 m; containers stacked in ten tiers)

• access to suitable ports of refuge (container handling equipment, free storage areas)

….more detail in other sessions!

Average adjusters’ views - Joern

• difficulties to obtain cargo manifests from various carriers involved

• security requested before delivery (or even oncarriage) of cargo

• salvage + G/A security „exceeding 100% of cargo value"

• lacking knowledge on the part of many people involved

• necessity to streamline the process

• improve the flow of information

• AMD currently reviewing problems with large containership casualties – in cooperation with IUMI, CMI, and others

Question: What can we do as an insurance industry to mitigate these developments?

Questions …