Sal Mercogliano on the Baltimore Bridge Collapse

order to get in and out of the port. What we know so far about the ship is it was a Singaporean flagship. It was chartered to Marisk the shipping giant, and it's kind of reminiscent a little bit of what happened in March twenty twenty two in the Chesapeake Bay with the ever forward. But it seems like the results of this are much more dramatic. So the bridge is entirely collapsed as we are recording this. The search and rescue mission is still underway. They're still looking for survivors

of this tragedy. So clearly a loss of life there. But Joe, this opens up a whole bunch of questions about how exactly this happened, what it means for shipping and freight, what it means for the wider economy.

The ship was doing as it normally would do a ship just before it had come off the Secrit Terminal. This is the Terminal Container terminal just outside of Baltimore, but it's inside the harbor. There, the ship had gotten into the channel and was heading outbound at about eight knots and everything seemed to be normal. Now, there are reports that when the ship was coming up the bay, and even when the ship was peer side, that the ship suffered some engineering issues. There were some issues with

black smoke, there was some issue with power loss. But before the ship ever would have thrown off lines, it would have done a series of tests at the dock to make sure that it had propulsion, it had rudder control, and it would have been cleared to leave. And a matter of fact, this ship was recently inspected by the

US Coast Guard under a port state agreement. The ship headed southbound, and what we have is both the information from marine traffic and from video provided from the Port of Baltimore, and what we see in these two images is the ship as it was heading toward the Franciscott Key Bridge, lost power. The ship went dark. And as a form mariner, I could say this that the worst feeling I've ever had on a ship is when everything goes quiet. There's always noise. There's always you know, because

that's a sign that you've dropped the plant. In other words, you've lost the engine. And silence is deadly. It just means everything has gone wrong. Now you have ae hundred thousand ton ship at eight knots roughly about ten miles an hour, with no control, and very quickly, within ten fifteen seconds we see lights come back on, but that's not clear that the ship's engines had come back on. That could be the emergency backup engines coming on to give you propulsion. We know, and I've talked to a

tug operator in Baltimore. They heard the ship's pilot and then remember ships will have a crew on board. We believe this crew to be an Indian crew, So the ship's master is ultimately in control of the vessel. Masters are ultimately responsible. But there were two Maryland pilots on board. Pilots assist, they provide expertise, but they don't take command. But one of the pilots signaled in may day that

they had lost propulsion. They were heading for the bridge and in the background alarms were sounding and that would have been the loss of power alarms up on the bridge. After the ships lights came back on, we see a distinct pail of black smoke come out of one of the ship's smokestacks. That's usually an indication that not only is the engine coming back online, but they're probably trying

to back down with the engine. They're forcing fuel into the engine to get it to go into reverse, and looks like what they were trying to do was slow down the vessel. Unfortunately, that was not sufficient. There'd be a big question during the investigation, which will probably be led by the Coast Guard and NTSB, what was the orders given up on the bridge. There's a vessel data recorder that is independently powered. It has a battery backup,

so we will get this. It'll have the information from the ship like a plane's black box, but also the recordings from the bridge. Did they order a stern move that they tried to steer the vessel. One of the things I worry about is they tried to back down, and when you try to back down a vessel that big at that speed, you start to lose helm control because you create this disturbance in the water around the propeller. And what we do know is the ship then continued

it's kind of slant to the south. It was being pushed by both the wind coming out of the north and also the torque of the propeller, and it impaled itself up against the southern pilon of the Francis Scott Key Bridge, and that resulted in the collapse of the bridge actually onto the bow of the vessel. We know the ship dropped its port anchor because you can see it down and it's streaming aft. So they try to do it, but an anchor at eight knots is just

going to drag the bottom. It's not going to stop.

particular protections around bridges? I've seen concrete barriers and things like that. I guess in general, it just seems kind of crazy to think that you have thousands of ships going under these giant structures on a day to day basis around the world, and if something goes wrong with one of them, then the entire bridge can collapse.

you have to build around a bridge for that. The pilings were not, you know, right up against the side of the channel. This ship came out of the channel, so it maneuvered out of what is then the normal channel. You know, when we had discussions about ever given for example, when it grounded in the Suez or ever forward, when it came out of Baltimore, you know, one of the questions was, well, maybe it should have tugboats with it at all times. It's not exactly clear that even if

you had tugs it would have prevented this from happening. Plus, tugs incur a big cost. Because there are dozens of ships a day coming in and out of port at times, you would need a lot of assets to do it. It would raise costs for it. It's hard to harden your infrastructure to the point where everything would be safe from every eventuality. If the ship had dropped its plant a minute earlier, a minute later, this never happens. The ship may have you know, lost propulsion, it may have anchored,

and we probably wouldn't even be talking about this. But because it happened at this key moment. And one of the things we've talked about in the past is one of the things we've done with global shipping is not just increase the volume of cargo that's moving around the world, but the velocity of it, and so that leaves very little time for what is usually needed for you know, you know, repairs and upkeep and all all that aspect.

We are moving cargo at an ever greater rate, and so there's a very small margin of error right now that we have, and unfortunately, we're seeing these accidents take place.

really get to the bridge structure. Where we've seen it more than anything else is actually in coastal waters, in inland waters where we've seen this on the Mississippi and the Ohio River, where we've seen these incidents take place in other places. But again, Baltimore is it is not a big port in terms of the United States. It's not even in the top ten of ports. But it's a port that does seventy four billion dollars of business

a year. It moves forty three million tons of cargo, so there's a lot of cargo moving in and out. And you know, we've talked about the idea about infrastructure and how much we need to kind of improve infrastructure. One of the limitations on the Port of Baltimore has been the Francis Scott Key Bridge because of its height and the nature of the bridge. So you know, we don't unfortunately spend enough on hardening and improving our infrastructure, especially in the maritime environment.

So you can offload containers in other facilities, that's not really a big issue, but it's a big car terminal. So you're talking about having to offload cars in other facilities maybe up in New Jersey or up in New England, or down in Savannah or Brunswick and Georgia. But then you're gonna have to move those cars up to the region of Baltimore. The biggest issue here is going to be the export of coal. Baltimore is a major port

for export of coal. And it's not like you can just move the coal to another facility, because you need specialized facilities for that, and the facilities that do exist are largely at capacity. So this is going to be a big problem. If you look at imagery of marine traffic or any other ais, you'll see just south of the Bay Bridge a fleet of vessels waiting to get into Baltimore, and then another one larger down to Chesapeake.

So this shutting down to the port of Baltimore is going to have a major impact on the transportation of energy out of the United States, in this case coal.

same sort of thing? We're in that specific area, there will be people on the ship who just know how to navigate that thing, and then they get out after the ship leaves the water.

the lay of the land. But if you remember what happened with ever forward, the incident that was later determined to have caused the grounding was the one pilot who was on board at the time was distracted, was on his computer and missed a key turn. It's not you. I would argue that we don't see an issue here with pilot at all. This doesn't seem to be a pilot error. It doesn't even seem to be a maneuvering

or here. Again, we could talk about judgment later on about whether or not they should have gone in the stern if that's what they did. But this seems to be a mechanical issue that has been the issue that plagued the vessel. And again, a pilot wouldn't really know this coming on board. This is the ship's crew knowing what is the status of their vessel, both mechanically and the ability of it to sail.

the vessel. It's extremely hard. We know the port anchor is down because we see the imagery of it, which would be the right anchor to drop Because you're trying to drag the ship back into the channel to get it back in there. The coordination between the pilot on the vessel with the bridge and trying to get vehicles off is key. Unfortunately, they were not able to stop all the vehicles on it. But again, you know, one of the big questions that I have going in is like, Okay,

what is the track record of this vessel? Did this vessel encounter issues coming up where there systematic maintenance problems with the vessel? Did it drop power while coming up to Chesapeake Bay? We don't know that for sure. You know, I've heard reports of the vessel did have some black smoke coming out of it, which is not always unusual. But even if it was up at the berth, whether instances of that was the vessel ready to go? Unfortunately, what tends to happen here is unless there's a full

inspection being done. Not every vessel that comes into the US ports are inspected. They are done periodically. They will be cleared by Customs and Coastguard, but they won't do a full inspection of the vessel and even and then we rely entirely on the ship and the ship's crew and the ship's operating company to ensure that ships are meeting their standards. We rely on that because that's the way international shipping operates, and the Singapore flag is a

good registry. It's a very good registry. This ship was under leased to Merisk, but it wasn't a Marisk ship. You'll notice there's no name on the side of the vessel, no company. This is basically like a rental vessel that they used to fill in for surge at the time. So there's going to be have to go back to Singapore where the company is based to find out what was the history of this vessel, did it maintain its maintenance?

The Classification Society, which is that third party that exists outside of the registry and the ownership that's supposed to ensure that everything is being done. It takes time to go through this, and that's what this is going to entail, especially because of the loss of life associated with this incident.

The coast Guard probably almost immediately went on board that vessel and would have drug tested, alcohol tested everybody on board. They will get depositions from them, try to find out there will be liability issues for whether or not there was negligence. In the case of what happened back in San Francisco in the twenty tens, they actually found the pilot to be libel at that time and there was actually a criminal case against him for his negligence with

a jail sentence involved. So we can see punishments against the crew, We can see issues with the pilots depending on whether or not there's culpability, but definitely with the owners of the company. The question is going to be does that go as far as Marisk Lines, who is leasing the vessel, or will it be with this Singapore company. As you know, in shipping, one of the things that happens a lot is ships are incorporated into these kind

of shadow corporations to basically diffuse liability. You know, the ship isn't owned by Marisk, there's no direct connection to it. It goes through a series of subcontracts and the question becomes how much of that liability will be there. It will also go to the insurance clubs, the P and I for the cargo, the hull and machinery for the vessel,

and they'll be assessing that damage. Plus we can see liability claims come in from those who have been killed or wounded on the bridge, and we can also see the same thing for cargo. Now that's going to divert because of this, because they're going to blame extra costs for doing this. The amount of liability that's at play

here is I can't even fathom right now. This is the thing about maritime cases is that they can just blow up into numbers that just really boggle the mind at times because of the impacts that have the butterfly effects down the entire supply chain.

the bridge off the bow of the Dolly. So you're talking about cranes, you're talking about barges, you're talking about all that stuff that operates in the coastal waters that would be both under the Dredge Act and under the Jones Act. So a lot of those facilities are going to come in when we watch what happened whatever forward. It took time to get cranes and barges in place that you needed to offload five hundred containers off of ever forward, this is going to be a much more

laborious process. I don't know if you're going to have to dredge as much as get the bridge off the bottom and recover it. We have a lot of salvage equipment and material. The problem is it's going to be scattered. So you're talking about repositioning, bringing all that equipment and

material to Baltimore. You're going to have to operate from basically one side of the bridge right now until you can get under parts of the bridge and certify you can cross those sections of the bridge that have not collapsed. So this is going to take a long time to do. Really didn'tmply at all to this. This ship was in international trade, so it stopped at multiple US ports, but

it wasn't moving cargo between US ports. But it is an issue here because we're going to have to see cargo offloaded at other ports.

safety issues such as the one we just saw. And I'm not necessarily agreeing with that statement, but certainly that's a sentiment that we have seen, at least on Twitter in less than twenty four hours after this incident occurred.

in international trade. And you know, you can have mechanical issues on whether it's a Singapore flag vessel or a US flag vessel, and you know, the big issue here is what was done to ensure that this ship was meeting its criteria, Whether it's Jones Act or a foreign flag vessel, you would have port state control, you would have a classification agency, you would have all those elements that are there. I mean, it's not clear at all if this is American flag vessel an American crew that

you don't have this accident. You know, anyone can have an accent. Again, this goes back to a larger issue. I would say that's that this takes away from, which is our investment in our maritime infrastructure. We talk about spending trillions of dollars of infrastructure money in the United States,

but very little of that is going to ports. And that means that, you know, one of the things that we could talk about here is you know, what sort of monitoring are we doing for vessels coming in and out of port, so orre requiring them to provide the maintenance records of their engines so that we can do better port state control. We are overtasking the US Coast Guard,

which has eleven missions. It identifies. Eleven missions is the key of the coast Guard, and one of them is inspecting foreign vessels to ensure that they're safe and operating in our waters. And when you task an organization smaller than the Police Department of New York to do this.

In ports around the United States, you tend to push the extremes, and so I think we need to be talking about elements of infrastructure, and you're going to see that play out when we start talking about the salvage of the port and salvage of the bridge and the vessel. That's a big issue. Unfortunately, we do not have the salvage assets that we probably need invested in our ports. Even the Navy doesn't have these vessels anymore. They're building new ones, but they're not near completion.

big infrastructure projects. Could we do it faster? In your view? Is there a way to make it so that it doesn't take five years and billions of dollars or is this going to be extraordinary difficult for rebuilding the bridge?

new bridge. You're right. You're gonna have to design it so that the Port of Baltimore now can handle larger vessels. So you're going to talk about a higher bridge. You know. It was interesting when we saw the fire that closed sections of I ninety five. We saw very quickly work done to open that bridge up very quickly. You got a little two lane section and then expand it out

so we can commit to it and provide it. But this is going to be a big infrastructure element right here, because you're going to need to obviously steal and design work being done. The salvage work will take time. It can be done faster probably than when it was originally built. But again, who's going to be paying for this? Right off the initial element, we know the state of Maryland is declared a state of emergency. FEMA is un scene, so we'll see federal assistance. This is in technically not

in Maryland waters. It's in it's US waters because the US controls the waterway, so it's a federal issue for clearing this up. So it's going to have to be a large commitment. So envision seeing Congress when it gets back, hopefully do an emergency appropriation to start the process of designing the bridge and start starting that work to get it done. But this is going to be years and

until you see a new bridge coming across. I think it's going to be weeks, if not at least a month or two before you clear the debris out of the river to fully open up the Port of Baltimore. You may be able to get part of it open quickly, but it's going to take time to clear all that material.

but there are certain areas of specialty. Yeah, you mentioned coal exports, He mentioned car imports and the sort of non fungibility of those supply chains. So yes, maybe they could be dropped off elsewhere, but the infrastructure is not designed for that cargo, so that'll be an interesting thing to watch.

fellow listeners. In fact, there's already tons of conversation going on right now about the bridge collapse. Go check it out discord dot gg slash, odd Lots.