Electric lorries that cost more to repair than to insure, cargo ships with no agreed fuel strategy, and a maritime sector operating under guidelines formalized only months ago: a Reuters Events and AXA XL report sets out the insurance risks that freight decarbonization is generating across road, sea, and air.
The report, Freight in a Low-Carbon Economy: Managing the Risks, arrives as the energy shift accelerates faster in parts of the supply chain than the repair and coverage infrastructure around it. Transport is the second-largest source of global carbon emissions, contributing almost half as much as electricity and heat production combined.
The path away from fossil fuels is more contested for freight than it has been for power generation. Brokers with clients in haulage, logistics, maritime trade, or commercial fleet management are already seeing that gap produce claims and coverage complications.
The most immediate pressure for UK brokers lies in road freight. Battery-electric drive trains have largely won the debate over hydrogen fuel cells for lorries, according to DNV's 2026 Energy Transition Outlook. The commercial case for fleet electrification is under strain from a repair cost problem that worsens as more vehicles enter service.
Electric vehicles cost between 20% and 25% more to repair than internal combustion equivalents at the same damage level, according to the AXA XL report. Battery replacement costs, specialist technician shortages and the calibration equipment needed to meet manufacturer standards all push costs up.
"Electric vehicles introduce a risk profile that differs from traditional fleets," said Thomas Saive, AXA XL's head of underwriting for motor in Asia Pacific and Europe. "The collision frequency appears to be comparable, or even improved, but the severity of losses can increase significantly due to repair costs, battery replacement due to repair and battery replacement costs."
Poonam Sejpal, head of motor underwriting for UK and Lloyds at AXA XL in London, cited an average three-month repair time for one major electric vehicle manufacturer. "Last year we had four new manufacturers enter the UK market, which led to repair challenges due to supply chain, lack of bodyshops and skilled technicians that have the calibration equipment required to repair to manufacturer standards," Sejpal said.
At that duration, replacement hire costs can push the total claim beyond the vehicle's value. Four new manufacturers entered the UK market last year and stretched bodyshop capacity. Repair networks are left without the staff or diagnostic tools to process the volume.
Research from FWD Consulting, published in December 2025, found that UK businesses face more than £461 million annually in electric vehicle write-off costs because of limited national repair capacity and rising fleet collisions. About one in five EVs involved in a collision is written off even after minor impacts.
The figure points to a systemic gap rather than an isolated claims problem. For freight operators, the exposure is starker: the Tesla Semi sells for around $290,000, and operators need years on the road to recover the purchase price. Extended repair downtime is a commercial threat, not a manageable inconvenience.
Beyond road freight, the challenge is more structural. Around 90% of the world's freight moves by sea, according to DHL Freight Connections data from 2023, and shipping relies almost entirely on bunker fuel, a heavy-to-medium grade oil now subject to increasingly strict sulphur and carbon regulation. The path to a cleaner fleet is far from agreed.
The Reuters Events report assessed nine alternative fuel and propulsion options for commercial shipping, from liquefied natural gas (LNG), and ammonia to battery-electric and nuclear power. None rated consistently well across availability, carbon reduction, infrastructure readiness, safety, and regulatory acceptance.
Jarek Klimczak, chief risk consulting officer for specialty at AXA XL, said the maritime industry is "very confused." Modern engines, he said, are "no longer designed to operate on one type of fuel, but a minimum of two if not three." The fuels with the greatest decarbonization potential carry the most hazard.
Ammonia could cut greenhouse gas emissions by around 90% compared with traditional marine fuel oil, but only if produced using renewable hydrogen. It is highly toxic and less energy-dense than conventional fuel, so ships need greater volumes per journey and carry reduced cargo as a result. Interim guidelines on ammonia as a shipping fuel were only approved by the International Maritime Organization (IMO) in May.
AXA XL joined the Nuclear Energy Maritime Organisation (NEMO) in February to help shape standards for floating nuclear technology. It is also part of the ARISE consortium, which is investigating the risks of accidental ammonia release at sea. The knowledge being built through both initiatives will inform how marine insurers price and structure cover for clients moving to alternative fuels.
Ships of the near future will carry multiple fuel types. Bunkering arrangements are likely to resemble chemical tanker operations rather than current port practice, with specialist jetties and remote handling infrastructure required.
Jan Scharrer, a marine risk consultant at AXA XL, said bunkering with fuels such as ammonia or hydrogen "will be different from the way we did it in the past. It will be more like chemical tankers, with special jetties in remote locations." Brokers advising on marine cover face a market where underwriters are still building the products and pricing models that a decarbonized fleet will need.
Getting clients the right cover will depend on the quality of information that moves between them, their brokers and their insurers. The pace of change across road and maritime freight means the energy transition is not a future concern. Clients switching commercial fleets to electric vehicles or moving cargo on ships that burn alternative fuels are already carrying risks that standard policies may not address.
Insurers are positioned to help through risk consulting, captive structures and political risk cover. Brokers are placed to connect their clients to those tools now.
