Crypto News: Supply Lines: Baltimore legal battle

The owner of the ship that destroyed Baltimore's Francis Scott Key Bridge, causing the indefinite closure of the port a week ago, is seeking to limit its liability to about $44 million.

According to reporting by my Bloomberg News colleagues citing legal experts, the company — Grace Ocean — could face hundreds of millions of dollars in damage claims.

On Monday it filed a petition jointly with Synergy Marine, which was operating the Singapore-flagged container ship Dali. They claim the collapse of the bridge was "not due to any fault, neglect, or want of care" of the companies and that they shouldn't be held liable for any loss or damage from the disaster.

Among the key legal questions now is whether the ship owners will declare "general average," a centuries-old principle that would spread losses proportionately among cargo owners and other stakeholders. That's what Evergreen Marine did when the container vessel the Ever Forward got stuck in the Chesapeake Bay in 2022 — requiring weeks of dredging and tug services to free it — after departing Baltimore's Seagirt Marine Terminal.

As the legal battles get under way, the cleanup work has begun and efforts to minimize the disruptions are gearing up. Demolition teams have started cutting the crumpled steal trusses and salvagers have cleared a small channel for barge traffic to resume.

Cargo vessels waiting Tuesday near the Port of Virginia in Norfolk

According to ship tracking data on the Bloomberg Terminal, the Port of Virginia looks set to handle much of the diverted shipments.

The Small Business Administration is opening a second recovery center locally to provide further federal government support to businesses affected by the tragedy. The Department of Transportation is providing $60 million in immediate funding. President Joe Biden will travel to Baltimore on Friday.

Lee Klaskow, senior logistics analyst with Bloomberg Intelligence, said Baltimore-bound cars, farm equipment and construction vehicles will have to be redirected to ports in Philadelphia, the New York area or Norfolk, Virginia. For inbound containers, he said those too should get absorbed pretty easily by gateways in the region.

"This is going to be a short-term disturbance until the channel is clear," he said, noting estimates of six to 12 weeks.

"I'm a little bit of a pessimist so maybe north of 12 weeks for that to happen," Klaskow said on Bloomberg TV. "And once that happens, freight is going return and the impact is going to be felt on supply chains but it's not going to be a major blow" like the pandemic snarls or the diversions avoid the Red Sea, he said.

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Baltimore Disaster Has Other Ports Racing to Absorb Cargo

So far there's been hardly a blip in spot container rates from Asia to the US East Coast. According to Freightos data on the Bloomberg Terminal, the cost on that route was $5,301 for a 40-foot container as of March 31, little changed from $5,284 the previous week but the first increase after five weeks of declines.

"A short-term shock, a disruption is always a stressful situation for the system but I think overall the supply chains are so strong, connected and reliant that workarounds can be found normally in a relatively short time frame," said Melanie Kreis, chief financial officer at DHL Group, told Bloomberg TV last week.

—Brendan Murray in London

Click here for more of Bloomberg.com's most-read stories about trade, supply chains and shipping.

Island hopping | Caribbean "golden passports" are getting more expensive, a response to pressure from the US and the European Union to crack down on citizenship sales. A group of four Caribbean nations has agreed to charge at least $200,000 for their passports starting June 30, double the current rate in some cases. The countries will also close loopholes that allowed passports to be sold at a discount.

The US is asking South Korea to adopt restrictions on semiconductor technology exports to China similar to those Washington has already implemented.
Japan approved as much as ¥590 billion ($3.9 billion) in subsidies to chip venture Rapidus, committing more money to its ambition to catch up in semiconductor manufacturing.
South African manufacturers' sentiment dipped but a significant shift in a subset gauging deliveries signaled that the country's snarled logistics may be starting to improve.
Russia's economy accelerated at the start of the year on the back of strong consumer demand, investment and exports, as the country continues to weather the impact of sanctions following the invasion of Ukraine.
Mexico's state-controlled oil company plans to halt some crude exports over the next few months, a move that would cut supply from a tightening global market.
China has dethroned the US to become the top alignment choice for Southeast Asians as Washington loses ground on a range of key issues from regional economic engagement to the Israel-Hamas War, according to a new survey.

Gartner Supply Chain Symposium/Xpo 2024 — Connect with top supply chain solution providers meeting in Barcelona, Spain, from June 10-12. Click here for more information.

If you have industry-specific events you'd like mentioned here, please email the information, the dates and a web link to brmurray@bloomberg.net

The continued attacks in the Red Sea by Houthi militants, which for the first time recently forced the vessel's crew to evacuate, is one of the many catalysts capable of pushing up the price of oil, according to Bloomberg Intelligence.
Peru's national society of industries (SNI) said on Monday that a lawsuit challenging the business model used for a new Chinese-owned port increases legal uncertainties for investors.
Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers.
Use the AHOY function to track global commodities trade flows.
See DSET CHOKE for a dataset to monitor shipping chokepoints.
For freight dashboards, see {BI RAIL}, {BI TRCK} and {BI SHIP} and {BI 3PLS}
Click HERE for automated stories about supply chains.
On the Bloomberg Terminal, type NH FWV for FreightWaves content.
See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

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