Shipping Firm Wallenius Wilhelmsen Faces $10 Million Loss From Baltimore Bridge Collapse

Norwegian car shipping major Wallenius Wilhelmsen anticipates a $5 million to $10 million hit to its core earnings from last week’s bridge collapse in Baltimore and expects the key vessel channel to remain inaccessible for weeks, it stated on Wednesday.

The company said that its vessel Carmen, which, according to shipping data, is among the most outstanding car carriers in the fleet, was stuck at Baltimore’s port. The ship and its crew members were prepared to sail as soon as the channel was restarted.

On Tuesday, the recovery teams also opened a second channel to enable relatively smaller vessels to navigate the Port of Baltimore.

Still, most commercial shipping stayed blocked by the collapsed bridge and stranded container vessel Dali, which brought the structure down about a week back.

The estimated aggregated total provisional financial impact on the EBITDA of the situation comes in the range of $5 to $10 million, assuming that the disruptions last for up to one month, Wallenius Wilhelmsen, a leading vehicle carrier in the world, explained in a statement on Wednesday.

The closure is expected to extend for weeks.

It declared that the impact estimates are based on that assumption. Once open, the terminal is anticipated to promptly resume its usual cargo operations as the vessels start making port calls as scheduled earlier.

Video Credits: Associated Press/YouTube

Of course, there are risks related to delays in the anticipated reopening or unexpected challenges in salvage operations.

The Port of Baltimore ranks first in the US in terms of the volume it handles of autos and light trucks, farms, construction machinery, imported sugar, and imported gypsum, per Maryland.

Some terminal operations outside the impacted area have also resumed. Cargo on the water bound for Baltimore is being re-routed to other US ports like Newport News, Savannah, and Newark, Wallenius Wilhelmsen added in the statement.

Analysts declared that Insurers and reinsurers may face up to billions of dollars in claims, with one putting the cost at nearly $4 billion. That would be making the tragedy a historical shipping insurance loss.

In a filing dated April 1 with a district court in Maryland, Dali’s owner, Grace Ocean Private Limited, and the vessel’s manager, Synergy Marine Pte, also petitioned to limit the liability to $43.6 million max.

The filing declared that the casualty wasn’t owing to faults, neglect, or want of care on the part of the petitioners. Insurance industry sources mentioned this is an opening effort to restrict such exposure.

The move to limit liability is similar to a strategy the owner of the Titanic used to limit compensation following its sinking in 1912, according to Loretta Worters, the spokesperson associated with the US Insurance Information Institute.

A US federal law of 1851 limits shipowners’ liability to the current value of the vessel.

In the case of the Titanic, its owner had sought to limit liability to the value of the lifeboats, mentioned Kevin Kearny, senior VP at insurance broker Hugh Wood. They were responsible for the value of the lifeboats, and that’s because the Titanic was lost.

Reference: Reuters

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