KEEP UP TO DATE WITH ALL THE IMPORTANT COVID-19 INFORMATIONCOVID-19 RESOURCE PORTAL

FANews
FANews
RELATED CATEGORIES

Fires at Sea: An ever-increasing hazard after 5 000 years of shipping

07 June 2021 Malcolm Hartwell, Head of Transport Practice at Norton Rose Fulbright

On 18 May 2021, the fire and resultant probable loss of the brand new container ship, the mv X-Press Pearl, along with all her cargo off Sri Lanka is a timely reminder of the devastating effect of fires at sea on seafarers and ships.

It is also a continuing reminder of the ever-increasing hazard caused by containerised shipping and the failure by regulators to force shipowners to develop ships able to safely carry many containers and extinguish fires before they spread.

The 2021-built vessel with a capacity of 2 700 containers was on passage from India to Singapore when a container caught fire. Despite the best efforts of salvors and firefighting tugs, the fire spread and the crew were evacuated, fortunately without any casualties. Efforts are underway to tow the blazing hulk out to sea to begin oil spill mitigation measures. Some containers have fallen into the sea and it is possible that all of the cargo will be destroyed and the vessel will ultimately declared a constructive total loss.

The shipping and insurance industries have seen numerous fires of this nature over the previous several years on container ships, some much larger than the mv X-Press Pearl. Although fires at sea have been a seafarers’ worst nightmare since the first large wooden vessels were launched by Egyptians several millennia ago, container ships are particularly prone to suffering extensive loss to cargo and ship due to uncontainable fires.

This is for a number of reasons. Firstly the containers are packed by the shippers of cargo and the owners are reliant on the shippers’ declaration regarding the containers’ contents. Many container ship fires are as a result of the mis-declaration or inadequate packing of hazardous cargo. Secondly, the design of container ships with their closely packed massive stacks, rows and tiers of containers make it almost impossible for ships’ crews to get to the seat of a fire in order to control and extinguish it. This problem has been exacerbated by the reduced number of crew, due to automation on board modern vessels.

Cargo and shipowners and their insurers carry the risk of loss which includes not only the value of the cargo and ship but also the costs incurred in attempting to extinguish the fire, salvage the ship and cargo, and prevent or mitigate pollution. In addition shipowners may have to tranship cargo to its final destination and recover the costs of doing so through the lengthy and costly process of general average.

The resulting litigation involving owners, cargo, salvors and any third parties affected by pollution is protracted and expensive.

Of course, the seafarers, who seem to be invisible to consumers and the world media, face the risk of losing their lives.

Under the various versions of the Hague Rules which are the liability regimes covering most oceangoing cargo, an owner or carrier has a defence to cargo claims caused by fire. To overcome this defence the cargo owner can show that the owners of the vessel failed to exercise due diligence to make the ship seaworthy at the commencement of this voyage and that this failure caused the loss. Evidence of this failure is difficult for cargo owners to gather.

With the fires caused by a misdeclaration of hazardous cargo, the ship owner and other cargo owners may have a claim against the owner of the misdeclared cargo. In practice however such claims may be worthless as the owner of the misdeclared cargo may disappear overnight or not have sufficient assets or liability insurance to meet claims which may exceed USD 100 million.

The reality is that existing ship construction regulations and firefighting equipment regulations were not designed to cater for the particular problems of fires on container ships. In addition to the inaccessibility of most fires on container ships, fixed firefighting systems which enable the crew to flood the ships holds with CO2 simply do not work with container fires. This is because the CO2 cannot get to the seat of the fire to smother it. In addition the lack of heat resistant boundaries between the large holds on container ships which were designed solely to increase carrying capacity and revenue, means that fires spread quickly throughout the ship.

Classification societies and insurers have developed a number of possible solutions, but none of them has been adopted by regulators. Until ship and cargo insurers force owners to deal with the peculiar problem of container ship fires, it is likely that the mv X-Press Pearl will simply become another item on the long list of catastrophic container ship fires.

Quick Polls

QUESTION

The next year or two will continue to be a turbulent one with regards to regulatory change. Do you think…

ANSWER

What we need is less regulation not more
The industry has overwhelmed itself with its own excessive regulation
The industry is bracing itself to deal with the regulatory changes, and brokers and insurers need to stay well informed of the effects of these changes
fanews magazine
FAnews June 2021 Get the latest issue of FAnews

This month's headlines

Broker and insurer collaboration should not be a one-way street
Running on outdated systems… There's risks
Policy wordings with respect to COVID-19
Death or divorce... how best to split assets
Ethical investing… principles and moral codes
Portfolio positioning will serve investors well
Subscribe now