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Lithium-Ion Batteries Continue to Impact Shipping

September 29, 2022 Zuleika Medina

Earlier this month, Allianz Global Corporate & Specialty (AGCS) issued a risk bulletin regarding lithium-ion batteries and their impact on shipping safety. Improper transportation and handling of lithium-ion (li-ion) batteries can lead to fires and explosions.

According to AGCS’s Specialty Safety Shipping Review 2022, fire/explosion is the third top cause of total losses over the past decade, with 120 losses. The number of fires has increased by almost 10% annually. In the last five years, there have been over 70 reported fires on containerships alone. This number may continue to increase as newer vessels are able to hold more cargo. Therefore, increasing the risk of fire and explosions.

Fires on larger vessels can be difficult to control as they burn at extreme temperatures, usually for days. Fires often start in a container and can be the result of misdeclared goods such as li-ion batteries. It is estimated that about 5% of the containers shipped consist of Undeclared Dangerous Goods. With over 130,000 ships in the global fleet, this percentage is staggering. Li-ion batteries that are improperly packed and stowed, can ignite, and potentially start a fire.

ACGS cites four main hazards involving the transportation of these batteries which are: fire, explosion, thermal runaway, and toxic gases. They identify the most common causes of the fire hazard as being substandard manufacturing of battery cells/devices; over-charging of the battery cells; over-temperature by short-circuiting, and damaged battery cells or devices.

In February, a fire that broke out on the Felicity Ace caused it to sink with about 4,000 luxury vehicles onboard. Estimated losses totaled more than $400 million. Reuters reported that the li-on batteries in some electric vehicles (EVs) caught fire, but it was not clear if they first sparked the fire. Fires in EVs with li-on batteries burn more intensely, are very difficult to extinguish and can spontaneously reignite hours or even days after they have been put out.

Li-ion batteries in electric vehicles have been the cause of some fires related to manufacturing defects, physical damage, substandard quality, internal electrical failure, thermal runaway.

AGCS provides some loss prevention guidance such as:

  • Properly train employees handling cargo to conduct visual inspections for cargo damage.
  • Have all stakeholders develop preemptive measures in their operating procedures.
  • Have an Emergency Response plan in place to tackle damaged or overheating li-on batteries.

Read AGCS bulletin here for full details on their loss prevention guidance.

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The Quest Newsletter is designed to provide critical information in the transportation industry. Avalon Risk Management is not responsible for the accuracy or reliability of information contained in articles. The reader/user assumes all risk in the use of such information.