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Home Industry Opinions Freemantle Highway fire exposes Mercedes to US$13 million loss: Russell Group analysis

Freemantle Highway fire exposes Mercedes to US$13 million loss: Russell Group analysis

A fire on the car carrier Freemantle Highway off the Dutch coast is expected to expose Mercedes-Benz to at least US$13 million (GB£10 million) in economic loss, according to an analysis by Russell, a data and analytics company.

Mercedes had previously announced it had 350 vehicles on board the vessel, which caught fire after leaving the German port of Bremerhaven and sailing to Port Said in Egypt.

The ship is carrying 2,857 vehicles on board, with 25 being electric vehicles.

News sources are reporting the Dutch coastguard spokesman’s comments that the fire had started near the electric vehicles.

"If the cause of the fire turns out to have been started by an electric vehicle, this will be a similar scenario to the Felicity Ace incident. The incident again raises questions surrounding the perils of shipping electric vehicles (EVs), and the flammable nature of EVs that contain lithium-ion batteries," said Suki Basi, Russell Group managing director.

He went on to point out that "the main perils of these batteries are fire and explosion that can cause conflagrations that burn for days and are difficult to extinguish."

Suki Basi commented, "While the risks are known in the insurance industry, there will have to be a wider discussion about pre-emptive measures to prevent this sort of event re-occurring, such as having dedicated ro-ro vessels for EVs."

Russel's managing director noted that using their ALPS Scenario Factory, Russel analysts identified that Mercedes has significant economic exposure to this event.

"With so much uncertainty in the global trade landscape, corporate entities and their insurers will need more accurate near real-time data combined with a strong analytical interpretation of those insights to ensure that they steer a path through potential disruption," concluded Suki Basi.

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