The Salvage Economics of a RoRo Fire
Hull value is the headline number. The real cost of a RoRo fire is salvage, wreck removal, cargo claims, and the route capacity lost for months after.
When a PCTC is declared a constructive total loss, the hull number gets quoted in the press and the rest of the bill goes quiet. The rest of the bill is where the real money lives — and it is the part that has been moving fastest over the last three years.
The four cost layers
- Hull — the insured value of the vessel. Bounded and well understood.
- Cargo — every vehicle on board, plus the GA contribution from cargo interests.
- Salvage — towage, fire-fighting tugs, stabilization, and tow-to-port fees.
- Wreck removal and environmental — uncapped, and increasingly the headline item.
Why detection lead time pays for itself
Salvors price intervention against escalation. A fire caught in the first 20 minutes is a tug job. A fire caught after the deck is fully involved is a multi-vessel, multi-week stabilization. The economic difference between those two outcomes is large enough to fund the entire detection layer for a fleet several times over.
Sources
- Allianz Global Corporate & Specialty — "Safety and Shipping Review" 2023 and 2024 (Felicity Ace total-loss commentary).
- International Salvage Union — Annual Industry Reviews (salvage and wreck-removal cost trends).
- TradeWinds — MOL Felicity Ace loss reporting and salvage cost analysis (2022–2024).
- Lloyd's List — post-casualty PCTC capacity reporting (2022–2024).
- [VERIFY: "$400M+" Felicity Ace total estimate — range reported across multiple secondary sources; exact figure not formally published.]
- [VERIFY: "~30% salvage and wreck-removal share" and "8–14 mo route-capacity gap" — adjuster-industry rules of thumb; no canonical primary citation.]
Questions, answered
What does a RoRo fire actually cost beyond the hull?+
Four layers: hull (bounded and well understood), cargo plus the general-average contribution from cargo interests, salvage (towage, fire-fighting tugs, stabilisation, tow-to-port), and wreck removal plus environmental — which is uncapped and increasingly the headline item. The hull number is only the part that gets quoted.
Why does early detection pay for itself economically?+
Salvors price intervention against escalation. A fire caught in the first 20 minutes is a tug job; a fire caught after the deck is fully involved is a multi-vessel, multi-week stabilisation. The difference between those outcomes is large enough to fund a fleet's entire detection layer several times over.
How long does route capacity disappear after a major loss?+
Adjuster rules of thumb put the typical route-capacity gap at 8–14 months after a major loss, with salvage and wreck removal together accounting for roughly 30% of total cost. The economic case for detection is in everything the hull pulls down with it.
Continue the thread
How Insurance Pricing Is Reshaping RoRo
After the 2022 PCTC losses, hull and cargo underwriters moved from an EV surcharge to outright capacity withdrawal on some routes. The fleet must respond.
IMO Sub-Committee Outcomes for 2027
Late-2025 CCC sub-committee outcomes telegraph a regulatory floor for vehicle-deck monitoring. Operators that wait to retrofit will be behind a hard date.
How Are Thermal Hotspots Detected?
The detection problem on a cargo deck is not measurement — IR sensors are commodity. It is deciding which delta in which cell at which time is real.