The recent fire on the 7,510 TEU vessel “Yantian Express” in the North Atlantic again raises the issue of the adequacy of controls relating to the shipment of dangerous goods in containers. This issue was raised recently in September 2018 at the IMO Sub-Committee on carriage of cargoes in containers. It is not unusual to see container fires on an almost weekly basis. Many fires are caught in the early stages. However, some go on to devastate the ship and put the lives of crew at risk. By way of example, the “Maersk Honam” which caught fire off Oman in March 2018 led to several deaths and an estimated US$50M million of losses including salvage and GA. The fire on the 13,800 TEU “MSC Daniela” in April 2017 took over 12 hours to extinguish. It took two days for the South African coastguard and salvage tugs to extinguish the fire on the “APL Austria” in February 2017. The unfortunately named “MSC Flaminia” was devastated by fire in July 2012 claiming the lives of three crew members and causing huge losses. The “Hyundai Fortune” sustained a serious fire in March 2006 off the coast of Yemen which led to serious damage to the ship and to about one third of the 5,000 containers on board.
Aside from the obvious risks to life and to the environment, fires on container ships are costing the insurance industry millions of dollars each year. Less than 1% of all cargo claims are due to fire yet the cost of fires amounts to about 30% of claims paid.
The main issues are improper stowage of hazardous cargoes inside containers and misdeclaration of cargoes in containers. The industry is responding to the problem but there does not appear to be any real sense of urgency. By way of comparison, think of what might happen if shipment of an undeclared dangerous cargo were to lead to the crash of a cargo aircraft?
Maersk are now working with the US National Cargo Bureau to randomly inspect containers to ascertain the frequency of misdeclarations and/or improper stowage of hazardous goods (see link here). The results are expected to reveal the extent of what many regard as a serious industry problem. The issue however is how to enforce existing regulations and prosecute those who do not comply. How does one deter an unscrupulous shipper from obscuring the true nature of the cargo shipped in a box so that they can pay less freight?
There are of course legal remedies. The most obvious remedy is to find the origin of the fire and the responsible shipper and initiate proceedings. However, legal remedies may not properly compensate the ship owner and their insurers and they certainly do not deter the practice. Many shippers are of limited financial means and, as matters stand, they are not required to carry compulsory liability insurance.
Our colleagues at BDM handle many high profile claims regarding container fires. We were involved in the “CCNI Arauco” explosion and fire and the “APL Austria” fire. Our senior partner led the team dealing with the “Hyundai Fortune” fire. We are familiar with the issues and we know the leading experts. We are therefore well placed to advise and protect the interests of clients who have been adversely affected by container fires.
A recent update on the Yantian Express fire can be found here.
