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Felicity Ace fire may cost VW, Porsche, Audi $155mn: Russell

The ship was carrying more than 4,000 cars, according to various news sources

Ship manager MOL Ship Management (Singapore) said late last week that the ship is assumed to remain on fire south of the Azores currently drifting away from the islands. (Image Credit: Portugese Navy)
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Ship manager MOL Ship Management (Singapore) said late last week that the ship is assumed to remain on fire south of the Azores currently drifting away from the islands. (Image Credit: Portugese Navy)

A fire on the Mitsui O.S.K Lines (MOL) operated car carrier (RoRo) Felicity Ace off the coast of Portugal's Azores Islands last week is expected to generate at least $155 million in expected losses for Volkswagen, Porsche, Audi, and Lamborghini vehicles on board the vessel, according to an analysis by Russell, a risk solutions company.

The ship was carrying more than 4,000 cars, according to various news sources, Russell said in its latest report.

Felicity had experienced fire while underway in the Atlantic on February 16, and the crew had been evacuated from the vessel safely.

"The Portuguese Navy, through the Ponta Delgada Maritime Rescue Coordination Centre (MRCC), has a warship standing by and monitoring the drift of Felicity Ace," according to a statement issued by MOL last week.

"An internal email from Volkswagen US reported in German media showed that the ship was carrying 3,965 vehicles of the VW, Porsche, Audi, and Lamborghini brands. Porsche confirmed that 1,100 of their cars were on board the ship," the report said.

The total dollar value of goods on the ship is estimated to be $438 million and of that an estimated $401 million was for cars and goods vehicles according to Russell's analysis.

The ship was travelling from Emden, Germany where Volkswagen have a large factory to Davisville in Rhode Island, USA.

Suki Basi, Managing Director, Russell Group

"These figures showed once again the precariousness of global supply chains," says Suki Basi, Managing Director, Russell Group.

"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.

"Using our ALPS Scenario Factory, we identified that the Volkswagen brand and its subsidiaries do indeed have a significant exposure to this event, running into the millions.

"With so much uncertainty in the global trade landscape, our view has always been that corporate entities and their insurers will need good near real-time data combined with a strong analytical interpretation of those insights to ensure that they navigate a way through potential disruption."

Ship manager MOL Ship Management (Singapore), said late last week that the ship is assumed to remain on fire south of the Azores currently drifting away from the islands.

​"A local patrol boat has arrived on scene with the initial salvage team.

Two large tugs with firefighting equipment have been arranged to support the vessel, one of which will arrive from Gibraltar with ETA February 20. A second tug, also from Gibraltar, is scheduled to arrive on scene with ETA February 21.

"In addition, a salvage craft with firefighting equipment is set to arrive from Rotterdam with ETA February 23/24." Currently, there is no oil leakage confirmed from the vessel, which remains stable, the statement added.

Felicity Ace has a market value today of $31.50 million, according to a report by VesselsValue last week. "There are very few suitable ships available in the market to replace her," says Dan Nash, Head of RoRos, VesselsValue. "MOL will have a difficult few days ahead dealing with insurance claims and fleet network changes."

Roll-on/roll-off (RoRo) ships are cargo ships designed to carry wheeled cargo, such as cars, trucks, semi-trailer trucks, buses, trailers, and railroad cars, that are driven on and off the ship on their own wheels. This is in contrast to lift-on/lift-off (LoLo) vessels, which use a crane to load and unload cargo.

Felicity Ace, built in 2005, is owned by Snowcape Car Carriers S.A. (100% owned by MOL).



Jyothi Shankaran

Jyothi Shankaran

Associate Editor, STAT Media Group. He has worked with IndiaSpend, Bloomberg TV, Business Standard and Indian Express Group. Jyothi can be reached at jyothi@statmediagroup.com


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