Risk Factor: Electronic Returns – Structural Safety for Defective Battery Logistics

The Silent Danger in After-Sales Processes

Traditionally, the first quarter of the year marks the peak of reverse logistics. Following the holiday season, warehouses are flooded with returned goods. However, the situation has intensified significantly with the rise of battery-powered consumer electronics and Light Electric Vehicles (LEVs) like e-scooters and e-bikes. What appears to be a standard logistical return is, in reality, a potential fire hazard and a complex insurance issue.

Unlike new goods logistics, the condition of the energy storage unit in a return is, by definition, unknown. A damaged cell, impact damage caused by the end customer, or improper packaging can turn a standard shipment into hazardous goods. For asset managers and operators of logistics real estate, this creates an urgent need to verify if their properties can handle this specific risk profile. Without dedicated, structurally integrated emergency concepts, operators risk losing insurance coverage. In the event of an incident, this could lead to total contamination and the complete economic loss of the asset.

Actuarial Re-evaluation: From Commodity to High Risk

For a long time, Lithium-Ion Batteries (LIB) were treated as standard commodities in property insurance policies, provided they were new and in original packaging. Those days are over. Driven by major loss events and stricter guidelines from international insurers (such as FM Global Data Sheet 8-1) and national bodies (VdS 3103), a rigorous re-evaluation is taking place.

The critical factors are the "State of Health" (SoH) and "State of Charge" (SoC). While manufacturers of new goods often reduce the SoC to a fire-safety-optimized 30–50%, returns frequently arrive fully charged or deeply discharged. An accumulator with "Unknown Status" is a "black box" for property insurers, carrying a high risk of thermal runaway. Consequently, insurers increasingly demand proof of structurally separated areas designed specifically for the quarantine and testing of these returns. If this proof is missing from the fire protection concept, coverage for the location is often denied or subject to prohibitive premiums, effectively rendering the property unusable for modern e-commerce tenants.

Structural Response to Thermal Runaway: The Quarantine Concept

The core problem with lithium-ion battery fires is thermal runaway—an exothermic chemical reaction where the cell produces its own oxygen, meaning it cannot be reliably stopped by conventional gas suppression systems or oxygen reduction. The structural response must facilitate physical separation and either a controlled "burn-out" or massive cooling.

The concept of a structural emergency area ("Havarieplatz"), strictly separated from the regular stock, has become the industry standard. For existing logistics properties, this often necessitates retrofitting. Ideally, these risk processes are moved outdoors. Special hazardous material containers or massive concrete modules with an F90 rating (fire-resistant for 90 minutes) are placed at a safe distance from the facade. VdS 3103 guidelines often recommend a distance of at least five meters to prevent fire spread to the main building. For property operators, this means outdoor areas can no longer be viewed solely as traffic routes or parking; they must be designated as essential technical functional areas for hazardous material handling.

If outdoor storage is not feasible due to site geometry or workflows, a "bunker-in-the-box" concept must be implemented inside the hall. This requires a structurally separated fire compartment (minimum F90, preferably F180/REI180) with direct pressure relief to the outside. Since burning batteries release toxic and explosive electrolyte gases (including hydrogen fluoride), coupling this system to a gas-triggered fire alarm and a powerful technical ventilation system—operating independently of the rest of the building—is indispensable. While these structural interventions are significant and impact both statics and the building envelope, they are non-negotiable for the property’s third-party usability in the electronics sector.

The Underestimated Cost Trap: Fire Water Retention

A frequently overlooked aspect when planning safety areas for lithium-ion batteries is the Fire Water Retention Guideline (LöRüRL). Since lithium fires are primarily fought by cooling, enormous quantities of water are required in an emergency. Upon contact with the damaged battery, this water becomes contaminated with heavy metals and hydrofluoric acid compounds, legally turning it into a substance highly hazardous to water. If this mixture enters the soil or sewage system, strict environmental laws apply (such as the German WHG), carrying potential criminal liability for the operator.

Structurally, this implies that the emergency area—whether an outdoor container or an indoor sector—must be designed as a liquid-tight basin. Conventional industrial floors are often insufficient; WHG-compliant coatings and upstands are required. Specifically, at sectional doors and transitions to the rest of the warehouse, automatic fire water barriers must be installed. These barriers close in the event of an alarm to dam the contaminated water within the fire compartment. For existing properties, retrofitting these retention volumes is often the biggest cost driver, frequently requiring floor lowering or the installation of underground retention tanks to provide the required cubic meters of retention capacity.

Integration into Operational Workflow

From the user’s (tenant’s) perspective, the real estate must integrate this security architecture seamlessly into the returns receiving process. The "Unknown Status" only ends after a qualified inspection. Until then, the package must not leave the secured area. A property that cannot structurally reflect this "loop"—for example, if the path from goods-in to the emergency area leads through the main warehouse—provokes operational inefficiencies.

Modern logistics layouts therefore position the returns inspection station in direct proximity to the loading docks, yet structurally separated by firewalls, with direct access to the emergency container. Investors should specifically check during due diligence whether the building services (TGA) and layout allow for such sector formation without requiring a complete hydraulic recalculation of the sprinkler systems.

Strategic Conclusion

The wave of returns in the battery-powered electronics sector is not a temporary phenomenon but a structural market trend that is permanently changing the requirements for logistics real estate. The fire risk posed by damaged lithium-ion batteries forces investors and asset managers to view fire protection not merely as a compliance task, but as an asset protection strategy.

For Investors: Check your portfolio for "Lithium-Readiness." Assets without outdoor space for emergency containers or the ability to create small, highly fire-resistant compartments risk suffering a "Brown Discount," as they become unsuitable for a growing group of creditworthy tenants (E-Commerce, Automotive, Electronics). Factor Capex for fire water barriers and WHG coatings into your hold strategies.

For Users: Define the "returns inspection" process step as a critical path in the lease agreement. Insist on structural standards that comply with VdS 3103 and your insurer's requirements before signing. Retrofitting during ongoing operations is almost always associated with massive disruptions to intralogistics.