Industry tracks dramatic rise in container ship fires
A series of fires on container ships this year alone has left importers with delayed, damaged, or destroyed cargo—and big insurance bills. Experts say there could be more to come.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
In the first three months of 2019, the maritime industry set what may be a record for the largest number of container ship fires in the shortest amount of time. Between January 1 and the middle of March, fires on board six ships had delayed, damaged, or destroyed hundreds of cargo containers:
On Jan. 3, a container on the Yantian Express caught fire off Canada's Eastern Seaboard. More than 260 boxes were destroyed.
On Jan. 29, the Olga Maersk was sidelined in Panama after a fire broke out in its engine room.
On Jan. 31, the APL Vancouver was stricken off the coast of Vietnam by a fire that started in a cargo bay.
On Feb. 13, a fire broke out in containers of charcoal on the E.R. Kobe near China. The ship was diverted to Hong Kong to unload the damaged boxes; three more containers caught fire as the ship continued on to Shanghai.
On Mar. 6, the giant Maersk Honam caught fire off of India, killing five crew members. It took five days to get the fire under control.
On Mar. 10, a container on the combined container/auto carrier Grande America caught fire off the coast of France. As the ship became engulfed in flames, crew members evacuated in lifeboats and were later rescued by a British naval vessel. The ship capsized and sank the following day.
There have been other fires on board container ships in recent years—more than 20 major ones since the middle of 2012, according to Richard W. Bridges, vice president, client development, for the cargo insurer Roanoke Trade. But the unusually high number of incidents should prompt importers and exporters to take a fresh look at their cargo insurance to make sure they have adequate coverage, he said during a panel discussion at the recent Coalition of New England Companies for Trade (CONECT) 23rd Annual Northeast Trade and Transportation Conference in Newport, R.I.
When ships and cargo suffer damage or delay, ship owners may declare "general average." This contractual obligation requires cargo owners to shoulder part of the loss, based on the value of their cargo and its percentage share of the "value of the voyage;" that is, the total value of the ship plus all cargo on board, Bridges explained. The freight is seized, and in order to get their goods back, cargo owners—or, more typically, their insurers—must pay a security deposit to cover the initial estimated cost of salvaging the ship as well as a bond to guarantee payment of any future adjustments to the general average liability.
Historically, Roanoke Trade has seen demands for 10 percent to 20 percent, but lately, these amounts appear to be rising, Bridges said. For example, the salvage security for the Maersk Honam was set at 42.5 percent of the CIF (cost, insurance, and freight) value of the cargo, with an additional 11.5 percent required as general average security, he said. Fail to put up the required deposit and bond, Bridges warned, and the vessel owner can hold and even auction off your cargo. (For more about general average, see "Ship in distress? Get out your wallet,"DC Velocity, July 2016.)
WHY SO MANY FIRES?
Experts say several factors are behind the recent flurry of conflagrations. One is the increasing size of container vessels coupled with the shrinking size of their crews.
"The smaller crews we have today don't have enough people to fight a shipboard fire," said Capt. Glenn Walker of the marine surveying and consulting firm Atlantic Marine Group, speaking on the same panel. "Their chances of quickly finding the source of a fire and putting it out are small."
Another factor is that today's bigger container ships are carrying a greater variety of cargo, and in larger quantities, said fellow panelist Kathy Schricker, regional vice president for cargo insurer Avalon Risk Management. That means more containers carrying hazardous materials are likely to be on board, she said. The widespread and well-documented problem of incorrectly declared and improperly packed and secured shipments of dangerous goods also increases the risk of a fire, she added. (Editor's note: Just days after this article was written, fire broke out on board the container ship KTMC Hong Kong in the Port of Laem Chabang, Thailand. A subsequent explosion injured more than 100 people. Authorities there reportedly blamed the incident on nearly 20 containers of undeclared volatile chemicals.)
Regardless of how promptly cargo owners pay the deposit and bond, they are in for a long wait before they can retrieve any cargo that is undamaged or salvageable. That's because it can be difficult to find a port that is willing and able to store both ship and containers for months while the physical damage and legal issues are sorted out. It was seven weeks before the Maersk Honam arrived under tow at the Port of Jebel Ali in the United Arab Emirates, and the Yantian Express spent almost four months in Freeport, Bahamas, before finally sailing back up the East Coast to Halifax, N.S., with the remaining intact containers on board.
For shippers, the wait can be excruciating, as information can be difficult, if not impossible, to obtain. Two importers in the audience at the mid-April CONECT conference, including one that had $30 million worth of merchandise on the Yantian Express, said that more than three months after the fire, they still did not know the location or condition of their containers.
Warehouse automation orders declined by 3% in 2024, according to a February report from market research firm Interact Analysis. The company said the decline was due to economic, political, and market-specific challenges, including persistently high interest rates in many regions and the residual effects of an oversupply of warehouses built during the Covid-19 pandemic.
The research also found that increasing competition from Chinese vendors is expected to drive down prices and slow revenue growth over the report’s forecast period to 2030.
Global macro-economic factors such as high interest rates, political uncertainty around elections, and the Chinese real estate crisis have “significantly impacted sales cycles, slowing the pace of orders,” according to the report.
Despite the decline, analysts said growth is expected to pick up from 2025, which they said they anticipate will mark a year of slow recovery for the sector. Pre-pandemic growth levels are expected to return in 2026, with long-term expansion projected at a compound annual growth rate (CAGR) of 8% between 2024 and 2030.
The analysis also found two market segments that are bucking the trend: durable manufacturing and food & beverage industries continued to spend on automation during the downturn. Warehouse automation revenues in food & beverage, in particular, were bolstered by cold-chain automation, as well as by large-scale projects from consumer-packaged goods (CPG) manufacturers. The sectors registered the highest growth in warehouse automation revenues between 2022 and 2024, with increases of 11% (durable manufacturing) and 10% (food & beverage), according to the research.
The Swedish supply chain software company Kodiak Hub is expanding into the U.S. market, backed by a $6 million venture capital boost for its supplier relationship management (SRM) platform.
The Stockholm-based company says its move could help U.S. companies build resilient, sustainable supply chains amid growing pressure from regulatory changes, emerging tariffs, and increasing demands for supply chain transparency.
According to the company, its platform gives procurement teams a 360-degree view of supplier risk, resiliency, and performance, helping them to make smarter decisions faster. Kodiak Hub says its artificial intelligence (AI) based tech has helped users to reduce supplier onboarding times by 80%, improve supplier engagement by 90%, achieve 7-10% cost savings on total spend, and save approximately 10 hours per week by automating certain SRM tasks.
The Swedish venture capital firm Oxx had a similar message when it announced in November that it would back Kodiak Hub with new funding. Oxx says that Kodiak Hub is a better tool for chief procurement officers (CPOs) and strategic sourcing managers than existing software platforms like Excel sheets, enterprise resource planning (ERP) systems, or Procure-to-Pay suites.
“As demand for transparency and fair-trade practices grows, organizations must strengthen their supply chains to protect their reputation, profitability, and long-term trust,” Malin Schmidt, founder & CEO of Kodiak Hub, said in a release. “By embedding AI-driven insights directly into procurement workflows, our platform helps procurement teams anticipate these risks and unlock major opportunities for growth.”
Here's our monthly roundup of some of the charitable works and donations by companies in the material handling and logistics space.
For the sixth consecutive year, dedicated contract carriage and freight management services provider Transervice Logistics Inc. collected books, CDs, DVDs, and magazines for Book Fairies, a nonprofit book donation organization in the New York Tri-State area. Transervice employees broke their own in-house record last year by donating 13 boxes of print and video assets to children in under-resourced communities on Long Island and the five boroughs of New York City.
Logistics real estate investment and development firm Dermody Properties has recognized eight community organizations in markets where it operates with its 2024 Annual Thanksgiving Capstone awards. The organizations, which included food banks and disaster relief agencies, received a combined $85,000 in awards ranging from $5,000 to $25,000.
Prime Inc. truck driver Dee Sova has donated $5,000 to Harmony House, an organization that provides shelter and support services to domestic violence survivors in Springfield, Missouri. The donation follows Sova's selection as the 2024 recipient of the Trucking Cares Foundation's John Lex Premier Achievement Award, which was accompanied by a $5,000 check to be given in her name to a charity of her choice.
Employees of dedicated contract carrier Lily Transportation donated dog food and supplies to a local animal shelter at a holiday event held at the company's Fort Worth, Texas, location. The event, which benefited City of Saginaw (Texas) Animal Services, was coordinated by "Lily Paws," a dedicated committee within Lily Transportation that focuses on improving the lives of shelter dogs nationwide.
Freight transportation conglomerate Averitt has continued its support of military service members by participating in the "10,000 for the Troops" card collection program organized by radio station New Country 96.3 KSCS in Dallas/Fort Worth. In 2024, Averitt associates collected and shipped more than 18,000 holiday cards to troops overseas. Contributions included cards from 17 different Averitt facilities, primarily in Texas, along with 4,000 cards from the company's corporate office in Cookeville, Tennessee.
Electric vehicle (EV) sales have seen slow and steady growth, as the vehicles continue to gain converts among consumers and delivery fleet operators alike. But a consistent frustration for drivers has been pulling up to a charging station only to find that the charger has been intentionally broken or disabled.
To address that threat, the EV charging solution provider ChargePoint has launched two products to combat charger vandalism.
The first is a cut-resistant charging cable that's designed to deter theft. The cable, which incorporates what the manufacturer calls "novel cut-resistant materials," is substantially more difficult for would-be vandals to cut but is still flexible enough for drivers to maneuver comfortably, the California firm said. ChargePoint intends to make its cut-resistant cables available for all of its commercial and fleet charging stations, and, starting in the middle of the year, will license the cable design to other charging station manufacturers as part of an industrywide effort to combat cable theft and vandalism.
The second product, ChargePoint Protect, is an alarm system that detects charging cable tampering in real time and literally sounds the alarm using the charger's existing speakers, screens, and lighting system. It also sends SMS or email messages to ChargePoint customers notifying them that the system's alarm has been triggered.
ChargePoint says it expects these two new solutions, when combined, will benefit charging station owners by reducing station repair costs associated with vandalism and EV drivers by ensuring they can trust charging stations to work when and where they need them.
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”