Monday, 18 November 2024

A “Black Swan Event” – General Michael Flynn Raises Questions About Baltimore Bridge Collapse. Chaos in Supply Chains and Trans-Atlantic Trade

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Here's a live broadcast of the disaster area in Baltimore, Maryland.

“Can we take the idea that this [Baltimore bridge collapse] was a terrorist attack off the table … and absolutely we cannot do that,” President Trump's former national security adviser (and retired lieutenant general) Michael Flynn told Alex Jones in an online interview.

Flynn called the container ship ramming the 1.6-mile-long bridge mile bridge at the Port of Baltimore a “black swan” event.

Meanwhile, the White House and federal government agencies have been quick to declare this was not a terror attack.

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Update (1423ET):

Maritime job placement company BalticShipping shows the captain of the container ship is a Ukranian.

Update (1356ET):

Bloomberg Intelligence reports:

Reinsurers Could Bear Brunt of Baltimore Bridge Collapse Claims

The bulk of claims from the March 26 Baltimore bridge collapse will likely fall on reinsurers. The ship has about $3 billion of reinsurance coverage over a $100 million retention. Chubb is reported to be the lead insurer on the bridge's property cover but might recover losses paid. We note it's still early, and this will be a complex loss.

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Update (1229ET):

President Biden is expected to address the press at 1230 PM EST regarding the Francis Scott Key Bridge collapse at the Port of Baltimore. At 0130 AM EST, a container ship lost propulsion and collided with the 1.6-mile-long bridge, leading to an instant collapse.

The current issue revolves around an emerging disruption in mid-Atlantic supply chains. The major East Coast port is now paralyzed due to the mangled bridge blocking the only shipping lane in and out of the harbor.

Bloomberg reports that the US automotive supply chain will be disrupted. Data shows that Mazda Motor and Mercedes Benz, Subaru of America, Mitsubishi Motors of North America, and Volkswagen Group have the most exposure to the port.

 

Source: Bloomberg

 

“It's a large port with a lot of flow through it, so it's going to have an impact,” John Lawler, Ford Motor Co.'s chief financial officer, said Tuesday on Bloomberg TV. 

Lawler continued, “We'll work on the workarounds. We'll have to divert parts to other ports along the East Coast or elsewhere in the country.”

Earlier, Consol Energy shares plunged nearly 10%, the most since October, as the bridge collapse will affect its massive coal terminal, which is served by CSX trains. 

A major sugar refinery owned by American Sugar Refining Inc. warned its Domino Sugar refinery only has six to eight weeks of raw sugar supplies as the blockage affects ships moving in and out of the port. 

Major cruise ship terminal

The supply chain snarls have sent major logistics companies scrambling across the US East Coast on Tuesday afternoon. 

“Our first priority is engaging clients to make plans for containers that were originally routed to Baltimore that will be discharged at other ports on the Eastern Seaboard,” Paul Brashier, vice president of drayage and intermodal for ITS Logistics, told CNBC. 

“These diverted volumes will impact the ports of New York/New Jersey, Norfolk and the Southeast and we have to prepare trucking and transload capacity to get that freight to its intended network,” Brashier said.

Goetz Alebrand, senior vice president and head of ocean freight for the Americas at DHL Global Forwarding, told CNBC:

“The immediate impact is with the cargo on board and its accessibility. Other planned shipments through Baltimore will likely be rerouted, potentially increasing cargo flow to New York, Norfolk, and nearby ports.

“Bulk and car carriers reliant on Baltimore must assess operations in the event of a prolonged closure.”

According to the shipping journal Lloyd's List, Baltimore is the eleventh-largest port in the nation, making an average of 207 port calls per month. 

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Update (1018ET):

An unclassified report from the DHS National Operations Center says the container ship “lost propulsion” before it rammed the Francis Scott Key Bridge. 

 

 

Here's a video of the incident:

Update (0935ET):

Bloomberg's Brendan Murray explains how the collapsed bridge blocking the only shipping lane in and out of the Port of Baltimore is about to spark a supply chain crisis across the Mid-Atlantic: 

An economic disruption along the US East Coast is unfolding with potentially tragic human consequences after a container ship struck the Francis Scott Key Bridge in Baltimore, sending nearly the entire roadway structure crumbling into the water.

The immediate priority of the rescuers is finding people who may have been on the bridge either working or driving across. The ship, the Singapore-registered Dali, was operated by charter company Synergy Group and is time chartered by Maersk carrying Maersk customers' cargo.

Of secondary concern in the days ahead will be tough questions about the effect on business, commuters, holiday travelers and the economy across the region.

The Port of Baltimore — the biggest handler of US imports and exports of cars and light trucks — looks to be out of commission indefinitely. The resulting bottleneck could accelerate a shift of goods through West Coast ports. Another crucial question: Which other ports have spare capacity to handle the Ro-Ro vessels that carry automobiles if Baltimore is closed for an extended period.

And it begins:

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Update (0814 ET):

ABC News reports the Singapore-flagged “Dali” container ship “lost propulsion” as it left the Port of Baltimore just before it rammed the Francis Scott Key Bridge. 

“The vessel notified MD Department of Transportation (MDOT) that they had lost control of the vessel and a collision with the bridge was possible,” ABC quoted the US Cybersecurity and Infrastructure Security Agency as saying, adding, “The vessel struck the bridge causing a complete collapse.”

Bloomberg's Josh Wingrove says, “Authorities are heavily downplaying the risk of foul play here.” 

Meanwhile, some X users are saying:

Update (0645 ET):

A massive container ship chartered by Maersk and moving outbound from the Port of Baltimore struck the Francis Scott Key Bridge around 0130 ET. The bridge collapse has paralyzed a large swath of the largest inland port on the East Coast. The port is ranked 9th for total dollar value of cargo and 13th for cargo tonnage among US ports. 

Governor Wes Moore released a statement on the collapse, declaring a State of Emergency in Maryland:

“My office is in close communication with US Transportation Secretary Pete Buttigieg, Baltimore Mayor Brandon Scott, Baltimore County Executive Johnny Olszewski, and the Baltimore Fire Department as emergency personnel are on the scene following the collapse of the Francis Scott Key Bridge. I have declared a State of Emergency here in Maryland and we are working with an interagency team to quickly deploy federal resources from the Biden Administration. We are thankful for the brave men and women who are carrying out efforts to rescue those involved and pray for everyone's safety. We will remain in close contact with federal, state, and local entities that are carrying out rescue efforts as we continue to assess and respond to this tragedy.” 

Chief Kevin Cartwright, the Baltimore City Fire Department's director of communications, told Fox Baltimore that at least 20 people and several vehicles had fallen into the river. 

In markets, Maersk shares in Copenhagen are trading down more than 3% on the news. 

Shocking radio transmission: “The entire Key Bridge is in the harbor.”

Shocking footage is coming from Baltimore City, home to one of the nation's largest marine ports. It shows a container ship striking the 1.6-mile-long Francis Scott Key Bridge and collapsing it.

Here's another view of the container ship strike. 

“This effectively shuts down the Port of Baltimore completely. I'm truly speechless,” one X user said. 

Fox Baltimore's Olivia Dance describes the scene as “devastating.”

According to the ship tracking website MarineTraffic, the Singapore-flagged cargo ship “Dali” slammed into the Francis Scott Key Bridge around 0130 ET. Bloomberg notes the ship was chartered by Maersk (remember Maersk's Ever Given in the Suez Canal a few years ago?).

The bridge spans the Patapsco River and carries an estimated 11.5 million vehicles annually. In this collapse, the only shipping lane in and out of the port was severed. 

Baltimore is the most inland port on the East Coast and is connected to the I-95 highway network. With no commercial vessels sailing in and out of port anytime soon, this is catastrophic for port operations and could spark supply chain snarls in the Mid-Atlantic and Northeast. We suspect inbound vessels are rerouting sails this morning. 

The bridge collapse has severed these major marine terminals. It's unknown when operations will be restored. 

 

 

According to the Maryland government's website, the Port of Baltimore handled over 52 million tons of international cargo valued at more than $80 billion last year, ranking it as the ninth busiest port in the United States. The data shows that the port handled 847,158 autos and light trucks in 2023, the most of any US port. The port also handles farm and construction machinery, sugar, gypsum, and coal. 

The port supports 15,330 direct jobs and 139,180 jobs in Maryland, according to the Maryland government's website.

Baltimore Mayor Brandon Scott's office posted on X:

“I'm aware of and en route to the incident at the Key Bridge. I have been in contact with Baltimore Fire Chief James Wallace, Gov. Wes Moore (and the county executives of Baltimore and Anne Arundel counties). Emergency personnel are on scene, and efforts are underway.”

Developing… 

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