Lithium-ion Batteries: Fire Risks and Loss Prevention Measures in Shipping

By Captain Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Global Corporate & Specialty October 3, 2022

About the Author: Captain Rahul Khanna is Global Head of Marine Risk Consulting at Allianz Global Corporate & Specialty. A marine professional with 26 years of experience within the Shipping and Maritime industry, Captain Khanna served more than 14 years on board merchant ships in all ranks, including Master of large oil tankers trading worldwide. Although shipping losses have more than halved over the past decade fires on board vessels remain among the biggest safety issues for the maritime industry. AGCS analysis of over 240,000 marine insurance industry claims between January 1, 2017, and December 31, 2021, worth approximately €9.2bn in value, shows that these are the most expensive cause of loss, accounting for 18% of the value of all claims.

As recent events have demonstrated, roll-on roll-off (ro-ro) car carriers, the largest of which can hold as many as 8,000 vehicles, can be susceptible to fire risks while there have also been a number of blazes on container ships.

In March 2022, the fire and subsequent sinking of the ro-ro carrier Felicity Ace with the loss of some 4,000 vehicles, put the risks associated with transporting electric vehicles (EVs), and the lithium-ion (Li-ion) batteries that help power them, firmly in the spotlight. The exact cause of the fire may never be known, but it is thought the presence of Li-ion batteries on board aggravated the fire conditions. Given the growing popularity of EVs means many more vehicles with Li-ion batteries will be transported by sea in future – together with the fact that this was not an isolated incident – it is crucial that the maritime industry focuses on loss prevention best practice.

Insurers have long warned about the potential dangers that lithium-ion batteries can pose for the shipping and wider logistics industries, whether they are being transported inside electric vehicles or as standalone cargo, if they are not handled, stored or transported correctly, with fire being a significant hazard.

Batteries are not only a potential cause of fire if damaged, overcharged or subjected to high temperatures, they can also aggravate other causes of fire at sea and are difficult to extinguish as they have the potential to reignite days or even weeks later. Safe carriage has become an emerging risk concern for the shipping community, raising questions about the adequacy of fire detection and firefighting capabilities on board vessels, cargo loading procedures and even whether changes in vessel design may be necessary, given specialist equipment is required to extinguish any blazes and salvage operations at sea can be challenging.

Hazards and causes

A new risk bulletin from AGCS: Lithium-ion batteries: Fire risks and loss prevention measures in shipping highlights four main hazards: fire (Li-ion batteries contain electrolyte, an ignitable liquid); explosion (resulting from the release of ignitable vapor/gases in a confined space); thermal runaway (a rapid self-heating fire that can cause an explosion); and the toxic gases that these hazards can produce. The most common causes of these hazards are substandard manufacturing of battery cells/devices; over-charging of the battery cells; over-temperature by short circuiting, and damaged battery cells or devices, which, among other causes, can result from poor packing and handling or cargo shift in rough seas if not adequately secured.

In most shipboard incidents a thermal runaway event can be a significant possibility unless immediate action is taken by the crew, such as suppressing a fire with copious amounts of water over a long period of time. However, this can be extremely challenging due to factors such as early detection being difficult, a shortage of crew members, and a lack of adequate firefighting capabilities on board.
Therefore, the primary focus must be on loss prevention and in the bulletin Allianz marine risk consultants highlight a number of risk mitigation measures for stakeholders through the supply chain to consider, including recommendations for shipping Li-ion batteries installed in EVs and as standalone cargo, as well as steps that can be taken to ensure safe storage in warehouses.

Electric vehicles on car carriers and within freight containers

While EVs are inherently safe, they do represent a significant difference in risk profile for shippers when compared with traditional vehicles and transporting them may represent an enhanced risk for the maritime industry, at least in the near-term. To mitigate the fire risks that can potentially result from Li-ion batteries during the transportation of EVs on car carriers and within freight containers, the bulletin highlights a number of recommendations including:

Ensuring staff are trained to follow correct packing and handling procedures and that seafarers have had Li-ion battery firefighting training
Ensure the battery’s state of charge (SOC) is at the optimal level for transportation. This ranges from 30% to 50%, depending on the manufacturer’s recommendations and the length of the voyage
Review the safety data information describing the process, and preventive actions to be taken in case of an accident
Check that all EVs display identification on windshields detailing the battery type
Ensure that all EVs with low ground clearance are labelled as this can present loading/ discharging challenges
Check whether the EVs have an undamaged battery system and ensure there is no charging during the voyage
Check that all EVs are properly secured to prevent any shifting during transportation
Early detection systems are critical, including watchkeeping/fire rounds, thermal scanners, gas detectors, heat and smoke detectors, and CCTV cameras.

Safety steps for storage

The bulletin also highlights a number of loss prevention measures that can help ensure safe storage of Li-ion batteries in warehouses, noting that large-format batteries, such as those used in EVs, ignite more quickly in a warehouse fire than small format batteries used in smartphones, laptops and power tools. Recommendations include:

Training staff in appropriate packing and handling procedures
A pre-defined Emergency Response Plan should be established to tackle damaged or overheating Li-ion batteries. Key employees should be trained in this before batteries are permitted on site
A pre-defined Hazard Control Plan to manage receiving, storage, dispatch and supervision of packaged Li-ion batteries should also be developed
Pre-emergency planning with the local fire department and on-site fire brigade, if available, is important, given the specific procedures that must be followed to eliminate the hazard
Follow the manufacturer’s guidance for use and storage
Protect battery poles from short circuit
Do not expose to long-term high temperatures or heat sources (including direct sunlight)
Ensure structural or spatial separation (min. 10 ft or 3 m) from other combustible materials if there is no automatic extinguishing equipment present
Floor stacking of Li-ion batteries should be strictly controlled in designated areas with limited stack heights, footprints and separation distances
Rack storage of Li-ion batteries should not be permitted unless the building and the racks are fully protected with a sprinkler system, with solid metal horizontal and vertical barriers between each storage bay
Ensure prompt removal of damaged or defective Li-ion batteries
Installation of a gas detection method targeting CO2 concentration and shock/impact and vibration sensors on large-format batteries should also be considered.

If the maritime industry is to improve its incident record related to the transportation of lithium-ion batteries, then all parties involved must understand the hazards involved, the most common causes and the problems associated with transporting in commerce. Only through a concerted effort by stakeholders in the supply chain can the industry hope to reduce the rate of incidents.

About the Author: Captain Rahul Khanna is Global Head of Marine Risk Consulting at Allianz Global Corporate & Specialty. A marine professional with 26 years of experience within the Shipping and Maritime industry, Captain Khanna served more than 14 years on board merchant ships in all ranks, including Master of large oil tankers trading worldwide.