The cargo ship Felicity Ace with around 4000 cars on board caught fire last week. The incident happened off the coast of the Azores Island in Portugal. The accident that took place on 18th February generated an expected loss of over $155 million. However, the ship’s crew was safely evacuated but the burning vessel is presently drifting away from the Azores. In today’s post, we will present a brief report on the burning of the container ship Felicity Ace and its repercussions on the global supply chain.
A bit about Felicity Ace – a car carrier with nearly 4000 cars on board
Felicity Ace – a specialist cargo ship went ablaze with over 4000 luxury cars including Porsche, Bentley, Audi, and Lamborghini models. The Panama flagged ship that was moving from Emden, Germany, caught fire off the coast of Portugal’s Azores islands. Snowscape Car Carriers which is a subsidiary of MOL owns Felicity Ace. The vessel manager has issued a statement saying they were ‘making every effort to contain the damage and resolve the situation.’
The ship whose size equals that of three football fields was heading towards a port in Davisville, Rhode Island. However, soon after, the crew issued a distress signal because one of its cargo decks caught fire. The Portuguese Air Force and Navy carried out the rescue operations and safely evacuated all the 22 crew members. The vessel was around 200 miles from Terceira Island when the Portuguese air and navy moved in to evacuate the crew. They carried out the rescue operation with much skill and care and used a helicopter to move the crew members to the Portuguese island of Faial.
According to VesselsValue, the current market value of the Felicity Ace is around $31.50 million. Moreover, there are not many ships in the market that can replace the Felicity. MOL is certainly having a hard time coping with the insurance claims.
The details of the cargo onboard the Felicity Ace
According to the spokesperson for the cars manufactured by Volkswagen, the ship was carrying around 1,100 Porsche and 189 Bentley. Audi- which is also a Volkswagen brand confirmed the presence of some of its cars on the ship. However, they didn’t comment on the number of cars inside the ship. As per an internal email from Volkswagen, the vessel was carrying around 3,965 Volkswagen AG vehicles. Volkswagen with its headquarters in Wolfsburg, Germany, manufactures its VW brand along with Audi, Porsche, and Lamborghini.
More than 100 of the cars on board were on their way to the Port of Houston, Texas. According to Luke Vandezande, the spokesperson for Porshe, the firm estimated around 1,100 of its cars on the ship before it caught fire. The net value of the cargo on the ship is around $438 million. Out of this, around $401 million was for the cars and goods vehicles on board.
According to Suki Basi, the Managing Director of Russell Group, a Risk Solution company, the fire will lead to losses of at least $155 million for Volkswagen, the brand that owns Audi, Bentley, Porsche, and Lamborghini.
The fire is under control but still active
The Felicity Ace is still on fire but we do not have any reports of oil spillage. On 21st February two huge tug vessels with firefighting equipment arrived on spot. They were working alongside another patrol ship to douse the flames and cool it down. According to a statement from MOL, “When conditions are safe the salvage team will board the Felicity Ace for an initial assessment.”
The first cargo disaster of 2022
The burning of the Felicity Ace is the first cargo disaster for this year. However, this is not the first time that valuable cars were lost at sea. Back in 2019, the cargo ship Grande America went ablaze and sank with more than 2,000 luxury cars. The Felicity Ace disaster was probably because of the lithium-ion batteries of the e-cars on board. According to Captain Joao Mendes Cabecas from the Port of Hortas, the fire from the lithium batteries necessitates special extinguishing equipment. These equipment were not present on board.
The fire was brought into control by a 16-person rescue team from Smit Salvage. The photos provided by the maritime authority of Portugal show that the bow of the ship burned severely. The 200-meter-long side of the ship was also completely burned. To quote from a statement by Captain Cabecas, “The ship is burning from one end to the other… everything is on fire about five meters above the waterline.” Emergency tow vessels arrived from the Netherlands and Gibraltar. However, they were not able to tow the Felicity Ace to the Azores because of the sheer size of the ship. It is so large that towing it to the Azores could block all trade at the port.
Impact of the accident on the global supply chain
The accident has come at a time when the automobile sector is already battling with global supply chain issues. For example, the pandemic-induced labour shortage, semiconductor shortage, and other global supply chain problems already jeopardized the normal working of the automobile sector. That is why this fire is exacerbating the actual supply chain crisis.
The government stimulus payments, low rates of interest, and high savings rates greatly increased the demand for cars in the USA where the ship was headed. The fire on the Felicity Ace will therefore result in unprecedented global supply chain woes. To quote Suki Basi, “These figures showed once again the precariousness of global supply chains…the incident comes at a bad time for global carmakers, who are in the middle of a supply chain crisis sourcing semiconductors, resulting in new delays for new cars. An event like this will not do a great deal in instilling trust with consumers.”