Logistec sued by insurer after warehouse fire

by The Associated Press

An insurer is suing the operator of a coastal Georgia warehouse where 50,000 tons of biofuel wood pellets went up in smoke this year, claiming “grossly negligent acts” caused US$4.5 million in losses.

The Brunswick News reports Tokio Marine American Insurance Co. filed the suit last month against Logistec, a Canadian stevedoring firm that leases the Georgia Ports Authority warehouse. Investigators believe some of the pellets decomposed and spontaneously combusted, starting a multi-day fire that devoured the warehouse and threatened nearby homes in Brunswick.

Tokio Marine was insuring the wood pellets, which were owned by Fram Renewable Fuels of Hazlehurst and awaiting shipment. Tokio said it wouldn’t have had to pay losses to Fram but for Logistec’s “gross negligence.”

“Logistec made almost every mistake it could make in storing wood pellet biofuel, a clean and safe biofuel manufactured by Fram,” the lawsuit states.

The lawsuit claims Logistec improperly stored pellets in tall cones and loaded wet pellets into the warehouse; scooped pellets from the top of the pile, leaving a bottom layer to degrade and overheat; and let flammable wood dust accumulate, all contributing to spontaneous combustion. It also alleges that Logistec had flawed sprinklers.

State investigators said Logistec responded with a private “fire brigade” and waited a full day before calling the fire department. No one was injured, but firefighters shut off gas lines to nearby homes and remained at the scene for weeks.

The company declined comment on the suit.

The warehouse that burned had replaced two buildings destroyed by a 2015 fire that also was blamed on spontaneous combustion.

Logistec says it remains committed to its 45-worker Brunswick operation. It began storing less flammable peanut hulls at the site in August after meeting stricter fire prevention rules set by the state. Logistec has said it doesn’t currently plan to resume handling wood pellets there.