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Fire costs the merchant shipping industry over US$20 million a year in large (over $100,000) cargo claims. While fire is well down the numerical list as a main contributor to the UK P&I Club's marine P&I claims, it is one of the most expensive.
In the period 1987 to 2001, the UK Club, the world's largest marine mutual, examined 68 such claims, ten of which occurred in port. Some 52 ships were tramping, 17 were on voyage charter and 35 were on time charter. They cost $59 million - an average of over $860,000 each.
At less than three per cent of quantity, fire comes significantly behind bad stowage, hatch leakage, bad handling, condensation, damage prior to loading, lashing failure and inadequate cleaning as a source of large claims. However, at over eight per cent of settlement costs, it is behind bad stowage, on a par with hatch leakage and higher than shell plate failures, groundings and bad handling.
Presenting an insurer's view of fire claims at a London conference in March, the UK Club's Loss Prevention Director Karl Lumbers said that around three quarters of large cargo claims fires start in holds. The remainder was spread between engine room, cargo tanks, accommodation and pump rooms.
Spontaneous combustion is thought to have contributed to a large claims-related fire in 46 per cent of cases. This was followed by stevedores smoking (31 per cent) and hotwork, such as welding (14 per cent), with minor contributions from machinery sparks in hatch areas, cargo lights and electrical equipment.
Cargoes suffering from spontaneous combustion and smoking included fishmeal, tobacco, cotton, woodpulp and coal.
Human error was to blame in over half the cases. Deck officers and crew were each responsible for only 12 per cent of incidents, less than half the figure for shore personnel.
Faulty onboard practices leading to claims related to daily use and double bottom oil tanks, careless cabin heating and open fire doors.
About ten per cent of fire claims were related to tankers but these accounted for half the settlement costs. Only container ships - four per cent of fires and 17 per cent of payout costs - approached this proportion. Between them, bulkers and cargo vessels endured 60 per cent of the fires but just 22 per cent of the costs.
Fire claims for bulkers and cargo ships, for 15-19 year old vessels and those of 10,000 to 30,000 grt far exceeded volumes proportionate to their entry. Only five per cent of claims related to ships over 100,000 gross tons. However, these cost around 36 per cent of the total.
The UK was the most popular jurisdiction for dealing with fire-related claims. Although only three per cent of fires occurred in the UK, 20 per cent of large claims were heard in the UK courts which awarded 22 per cent of the settlement total. Japanese courts heard less than five per cent of cases but still accounted for nearly 20 per cent of the awards. American courts heard almost 12 per cent of fire cases and Chinese around seven per cent.
Mr. Lumbers said it was essential that masters and crews had full appreciation of their cargoes and all aspects affecting its stowage. A rigorous cargo watch should be kept and no smoking strictly enforced. "There should be no need to explain to crew which of the contributory factors is hugely avoidable. However, we should emphasise the importance of errors by shore-based personnel in contributing to incidents from which claims arise."
For further information:
Karl Lumbers/Nick Whitear
Thomas Miller & Co.
Tel. +44 (0) 20 7283 4646
Fax: +44 (0) 20 7204 2353
e-mail: karl.lumbers@thomasmiller.com
e-mail: nick.whitear@thomasmiller.com
Issued by:
Martin Rowland
Dunelm Public Relations
Tel. +44 (0) 20 7480 0600
Fax: +44 (0) 20 7480 0606
e-mail: info@dunelmpr.co.uk
Website: www.dunelmpr.co.uk
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