Ships traversing the globe are particularly exposed to large catastrophic losses from a variety of causes. From combustible cargo to the wrath of Mother Nature, we’ve addressed some of the top safety concerns for shippers below.
Fire
Losses from fire and explosion have been a leading cause of total ship losses for many years. And we have seen the prevalence and severity of these incidents increase to the second-ranked cause of loss for ships at sea in 2022. There were 209 fire-related incidents reported last year alone, making it the highest number in a decade.
Fire has always been a major concern for the shipping industry. But there are some contributing factors that compound the risk as it presents itself today.
An increasing number of large fire losses have involved Lithium Ion batteries and the improper storage, handling, and/or transportation of the product. These rechargeable batteries are commonly used in consumer electronics as well as electric vehicles. Because of the risk they pose to ignite and accelerate large fire losses, there are many industry guidelines on safe handling and transportation from IATA, US DOT, FAA, IUMI, UN 38.3, and other sources. This hazard, paired with the fact that dangerous cargo is often mis-declared and, therefore mishandled can lead to severe consequences.
We have recently seen a rash of incidents involving fires aboard car carrier ships, most of which had been started by or accelerated by electric vehicles on board.
Wars
Global conflicts like the war in Ukraine are another safety concern for the shipping industry.
For instance, at the start of the Ukrainian conflict, 94 merchant vessels with roughly 2,000 crew members were trapped in the Ukrainian ports. Not only were the crew members unable to leave the vessels and return home, but they were under the threat of attack. Sadly, several vessels were attacked and sunk, destroying the cargo and killing several crew members.
Risks of war continue to pose a significant safety hazard to ships in and around the Black Sea and outside of any other conflict areas across the globe.
Natural Disasters
Hurricane, Flood, Earthquake, Wildfire, Windstorm and other potentially catastrophic natural disasters pose significant threat to cargo, facilities, and transportation alike. Hurricane Ian in 2022 caused over $112 billion in damage from wind and flood related causes primarily. And had a massive impact on the cargo transportation industry in the immediately affected area for weeks afterward.
Large hurricanes in particular can be among the most costly natural disasters. They cause major lasting damage to shore-based infrastructure and disrupt typical supply chain operations for weeks afterward. And often cause ships to divert from their scheduled path or risk major loss from fallen cargo and rough seas.
Falvey Insurance Coverage
From man-made risks to environmental hazards, there are many dangers to the safe shipment of cargo across the end-to-end supply chain. The shipping industry’s safety record has steadily improved over the last ten years. However, ensuring proper shipping insurance coverage is still an essential strategy that companies can take to protect against financial loss. Falvey Insurance Group offers a wide range of insurance policies to address maritime risks. Contact us today to learn more about how to protect your shipments.
