Modern warehousing risks: lithium, logistics, and loss prevention

Automation and high-density storage have transformed warehouse efficiency. They can also tighten the links between ignition, fire spread, operational disruption and liability when controls or risk information do not keep pace.

In 2019, a fire at Ocado’s customer fulfilment centre in Andover became a four-day incident and left the building a total loss. More than 500 robots operated on top of two densely packed storage grids.

Hampshire Fire and Rescue Service found that the fire was deep-seated, in a fuel-dense area that crews could not access. A delayed emergency call and the temporary shutdown of the sprinkler system were identified as contributory factors in its development. According to HFRS, ignition occurred because of arcing during a robot’s charging process.

The public report does not identify the battery chemistry, so the incident should not be read as evidence of a lithium-ion fire. Its value lies in showing how charging, automated storage, difficult access, detection and suppression systems, and decisions made during the response can become part of the same loss.

The warehouse has changed. Has the risk picture kept pace?

Automation can improve operational efficiency, speed order fulfilment and make more intensive use of a warehouse’s height and footprint.

HSE’s warehousing guidance identifies collision, trapping, load collapse and inadvertent movement among the hazards associated with automated systems. These risks can become particularly relevant at transfer points or when maintenance requires people to enter restricted areas. The guidance recommends hazard analysis and risk assessment when a new process is introduced or significantly changed.

The fire exposure can also become more interconnected. Electrical and mechanical equipment may operate close to stored goods. Stock may be packed densely or held in plastic containers, while layouts designed around machines can give people and fire crews less direct access to an incident.

None of this establishes that warehouse fires are becoming more frequent.

“Modern warehousing is not automatically more dangerous,” says David Reynolds, Head of Risk Engineering & Surveys at RiskSTOP. “The key question is whether controls still reflect the operation. Charging, automated equipment, dense storage and concentrated stock values can interact, while changes often build up gradually.”

Lithium within a wider battery picture

In warehouses, lithium-ion exposure may arise through batteries held as stock or returns, lithium-ion batteries used in handling or automated equipment, and fixed battery energy storage systems. These are distinct exposures, and other motive-power battery chemistries may also be present.

Mechanical damage, manufacturing defects, overheating or overcharging can trigger thermal runaway, a rapid heat-generating reaction that can propagate from one cell to others and lead to fire or explosion. UK government-commissioned research describes these mechanisms, although the practical risk still depends on the battery, its condition and its surroundings.

A damaged returned product in general stock, several vehicles charging beside combustible packaging and a battery operating within an inaccessible automated grid present different scenarios. Controls should follow the actual equipment and activity rather than a generic “lithium present” response.

RiskSTOP has previously examined how insurer expectations of lithium battery fire risks are changing, including why insurers are asking more detailed questions about battery storage, charging, damaged units and ownership of controls. Those questions belong alongside storage, protection and business-continuity information.

When storage and protection fall out of step

Sprinkler design takes account of factors including occupancy, fire load and burning characteristics, storage height and layout, ceiling clearance and system type. Detection and emergency access require separate consideration.

Government warehouse guidance advises that significant changes to storage arrangements or materials should prompt a check that an existing sprinkler installation remains appropriate. RiskSTOP’s storage and distribution guidance similarly highlights the need to match commodities, storage methods and maximum heights to sprinkler design. Plastic tote bins, solid shelving or different stock can alter suitability.

Dense or automated storage can be designed with suitable protection, but the configuration needs competent, site-specific assessment. A system matched to yesterday’s layout should not be assumed to cover tomorrow’s operation without review.

Peak inventory, overflow stock, damaged returns and temporary charging can change what is present and where. Effective change control can prevent temporary arrangements from undermining clearances, access, detection or emergency procedures.

Human response remains part of the system. The Andover findings underline the importance of raising the alarm promptly and having clear, competent procedures governing any intervention with sprinkler controls. Any equipment-isolation procedure should be site-specific and technically informed, rather than improvised during an incident.

When physical damage becomes a wider loss

Where high-density storage concentrates more value in one area, a local incident can expose a larger proportion of inventory. If automated equipment is bespoke, debris removal, replacement and recommissioning may extend recovery. Lockton notes that complex automated systems can contribute to longer restoration times and business interruption.

Operators therefore need to understand alternative capacity, critical suppliers, replacement lead times and the consequences of losing a site or system. Brokers should also test whether stock values reflect replacement cost, customer goods for which the insured is responsible and maximum seasonal or other peak holdings, always against the actual policy wording.

A serious incident may injure employees, contractors or other third parties, damage customer-owned goods and disrupt contractual service commitments. Whether legal liability attaches, and how insurance responds, will depend on the facts, contracts and policy wording.

Building a better risk conversation

The most useful conversation starts before renewal exposes an information gap. What has changed in the stock, packaging, height or layout? Which batteries are present, where are they charged and how are damaged units handled? Does the fire strategy still reflect current operations? What values and dependencies accumulate during peaks?

Fire-safety duties fall on the relevant legal dutyholders. In England and Wales, the Fire Safety Order places duties on the “responsible person”, often the employer and others with control of the premises. Scotland and Northern Ireland have separate regimes. Law, government guidance, industry guidance and insurer requirements should be identified separately. Statutory fire-safety duties focus principally on protecting people; property and business-continuity exposures may call for additional protection informed by competent advice.

RiskSTOP’s 2026 infographic records more than 27,000 improvement requirements across 16,800 commercial assessments over the preceding year, with electrical safety and combustible storage among the most common concerns; the figures are not warehouse-specific.

A RiskSTOP Risk Management Site Survey can help brokers and insurers obtain a clearer view of site hazards and improvement needs, while Risk Improvement Assistance can support policyholders in progressing insurer-set improvements.

Reviewing the exposure before the next layout change, technology investment or renewal gives businesses the chance to address gaps while options remain open.