An important impact is expected to have the wreck of the Dali ship and the collapse of Francis Scott Bridge Key in particular in the trade in cars between – Germany and insurance companies. Insurance compensation for the collapse of the Francis Scott Key Bridge in Baltimore, USA last Tuesday (26.03. 24) could be one of the largest ever in maritime insurance, according to London CEO Lloyd’s John Neal, according to Bloomberg. “This has the potential to be one of the biggest damage to shipping in history,” Neil said in an interview with Bloomberg News today (28.03.24). “This is a multibillion dollar loss. I think it should be, but I think it’s a little early to say what we really think it will cost.” The bridge collapsed the day before yesterday (26.3.2024), after being hit by a container ship, the flag of Singapore Dali, sending vehicles into the water and chaos threatening one of the most important ports on the east coast of the US. Barclays analysts estimated that insurers face claims of up to $3 billion in their note yesterday. Insurance compensation only for damage to the bridge could reach $1.2 billion, Barclays said on her note, predicting further potential liabilities of $350 to $700 million for unfair deaths and amounts not yet set for business holidays as long as access to the city port is blocked. “Determining who will pay these claims will depend on whether the accident was caused by negligence or mechanical harm,” Bloomberg Intelligence analysts Charles Graham and Kevin Ryan wrote on their note on the day of the collapse. “Data of the multiple parties involved, settling any claims is likely to be complex”. “There is a pretty complicated grid of insurers involved in this,” Neil said in the interview today (28.3.2024). Lloyd’s announced today (28.03. 24) £5.9 billion (US$ 7.4 billion) takeover profits for 2023, an increase of £3.3 billion compared to the previous year, due to the lower cost of major risks and claims from natural disasters. The automotive sector is most affected by the Baltimore Bridge The biggest impact since the Francis Key Scott bridge collapse in Baltimore will be on the automotive sector, according to DHL’s financial director (Melanie Krais) Melanie Kreis. Supply chains “are much more durable than some expect at first glance,” Krais said during an interview on Bloomberg television. “In particular as regards the situation in the Red Sea, I really wouldn’t overestimate it”. In its report the leading German newspaper Handelsblatt says that the wreck of Dali could now be a new burden for international supply chains. Instead of using Suez’s canal on his way from Colombo, India to Baltimore, he carried his steel crates around the Cape of Good Hope. This is because of the rocket attacks by the Huthi militias on the Red Sea, which have hindered international trade since the end of November 2023. The supply of goods by sea freight is already burdened accordingly. Now the ship, which was built in 2015 and flying the flag of Singapore, also causes massive disturbances in freight transport. Dali was chartered by Danish shipping company Maersk. The consequences for German car exporters have since been increasing, fears of an additional shock to global logistics. “The disaster recalls other challenges for supply chains”, warns Chris Rogers (Chris Rogers) from the S&P Global Market Intelligence rating company, “including blocked access to the Red Sea, Panama Canal affected by low water level and potential threat of strikes in U.S. ports in autumn”. Baltimore is considered the top port in the US for the transportation of cars and light trucks – especially for German manufacturers. Mercedes-Benz maintains a delivery hub in the port itself, while BMW and Volkswagen have installed businesses on the sea side in front of the damaged bridge. The exclusion of the American port caused by the accident could therefore have an impact on the port of Bremen. Unlike the port of Elbe in Hamburg, which serves mostly freight lines to Asia, the ports of Bremen focus heavily on connections with North America. The majority of car carriers also travel from there. Another German company listed in DAX is also affected by the collapse of the bridge. Heidelberg Materials , formerly known as Heidelberg Cement, operates a loading station within the port. Alternative ports make trucks rare Outside the port basin, Amazon, DIY Homedepot chain and Under Armour sports equipment manufacturer also feature large distribution centers. Only seemingly are not affected by destruction. Although their warehouses are beyond the blocked entrance of the harbour, they cannot be supplied from the sea without the container terminals in the blocked port. Consequently, the supply chain service provider Four Kites warns of time-consuming diversions. “Although it is still too early, we assume that not all container transport ships arriving according to the timetable will be able to approach terminals in the port of Baltimore and should be diverted to alternative ports instead,” says Mike DeAngelis director. The German shipping container carrier Hapag-Lloyd, which approaches Baltimore on two scheduled routes, stopped receiving orders for these routes and offers its customers the alternative ports of Norfolk, 400 km away, and the port of New York, about 280 km away. “All containers that are already waiting to be exported from the port of Baltimore must either wait for the waterway to be reopened or transported from the terminals and transferred to alternative ports,” DeAngelis says, describing the dilemma faced by maritime transporters. It is still too early to tell to what extent this will happen. “It will inevitably have an impact on freight flows”, he is sure. Even if debris is removed from water, traffic in the area will be affected, estimates Four Kites expert Jason Eversole. “Truck drivers are reluctant to carry cargo inside and outside the area without price increases”. Shipping company customers are threatened with payment obligation Kühne + Nagel, the world’s largest maritime transport company, also expects time-consuming diversions. “We see them both for exports and imports,” says maritime transport chief, Michael Aldwell, [with cargo now carried through Norfolk and New York”. However, the capacity of these two terminals is large enough not to expect problems with the volume of goods at the terminals. However, Aldvel expects significant interference in the traffic of trucks between ports. “This will absorb the transport capacity of the seas,” he fears. According to a Maryland state website, the Baltimore port ran 847,158 cars and light trucks last year, which makes it the top US port for the industry for the 13th consecutive year. The port also moved large quantities of imported sugar, plaster and coffee, as well as coal for export. With over 10 million tonnes of goods, Baltimore is one third larger than Germany’s largest port in Hamburg. The volume of goods left in Baltimore is already similar. At least 21 ships are in the waters there without knowing when and how easily they can get out. In addition to at least three bulk carriers, a transport vehicle and a small tanker, a second car transport is anchored just below the bridge at the Volkswagen terminal. It was meant for Sri Lanka. Whether he would be allowed to leave remained unclear until yesterday (27.03.24). In addition, another 4,900 sea containers have been stuck in the wrecked Dali. Their owners could be invited to pay even the rescue costs. This is required by the “general average price”, a global applicable provision of international maritime law introduced nearly 150 years ago. However, most exporters are insured, reporting transport experts. The shipowner Grace Ocean is likely to be held responsible for repairing damage to the bridge reconstruction. According to a representative, no claims have yet been raised against the Danish shipping company Maersk, which had chartered the cargo ship. “No Maersk employee was on board,” he said.
Baltimore: How many ships are stuck and which businesses are affected
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