What Baltimore tragedy says about ocean trade - Hindustan Times
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What Baltimore tragedy says about ocean trade

Apr 20, 2024 10:07 PM IST

Failure to address the serious global trade issues exposed by the Baltimore accident could lead to even more tragic economic, and relationship consequences

On March 26, a cargo ship crewed by Indian seafarers headed for Sri Lanka collided with the Francis Scott Key Bridge as it was departing the Port of Baltimore, a major shipping hub on the United States (US) East Coast. Nearly three weeks after the incident, US authorities are still in the process of determining the causes behind the power failure aboard the Singapore-flagged “Dali,” which apparently caused the ship to strike the bridge.

The collapsed Francis Scott Key Bridge lay on top of the container ship Dali, Monday, April 15, 2024, in Baltimore. The FBI confirmed that agents were aboard the Dali conducting court-authorized law enforcement activity. (AP Photo/Julia Nikhinson)(AP)
The collapsed Francis Scott Key Bridge lay on top of the container ship Dali, Monday, April 15, 2024, in Baltimore. The FBI confirmed that agents were aboard the Dali conducting court-authorized law enforcement activity. (AP Photo/Julia Nikhinson)(AP)

The incident rendered one of the largest ports in the US inaccessible leading to a catastrophic disruption in the flow of goods. As reported by the Associated Press, the port handled over 52 million tons of foreign cargo valued at $80 billion last year.

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For more than a decade, the Port of Baltimore has been the primary US port for automobile and light truck cargo, managing more than 847,000 vehicles last year. (This volume exceeds a fifth of all vehicles sold in India last year.) The port also ranks as the second largest in the US for coal shipments.

The shipwreck has brought attention to the vulnerabilities within the global trade infrastructure, where goods traverse vast distances and supply chains span continents.

Despite significant growth in air and road transportation over the past century, ships remain the primary mode of transportation for global trade. According to the Review of Maritime Transport, a publication of the United Nations Conference on Trade and Development (UNCTAD), more than 80% of the global trade volume in goods is transported by sea.

For the US, the accident comes at a critical juncture, coinciding with two significant global supply chain disruptions in the past five years. The first was the Covid-19 pandemic which caused countries to implement lockdowns and restrictions to curb the spread of the virus. This resulted in supply shortages, price fluctuations, and widespread economic uncertainty worldwide.

The second was the Russia-Ukraine war, which started in February 2022. That war coupled with the extensive Western sanctions led by the US and heightened geopolitical instability triggered a new wave of disruption of global supply chains, particularly in the energy sector. While the magnitude of disruptions like Covid-19 and the Russia-Ukraine war is unparalleled, they are not without precedent. Throughout history, factors such as pandemics, natural disasters, and conflicts including maritime piracy, have frequently contributed to disruptions.

Today, there are additional new challenges and threats such as cyberattacks targeting shipping networks and others precipitated by the implementation of new technologies which have the potential to seriously damage the efficiency and safety of shipping routes.

Another vulnerability in the coming years will be associated with the climate crisis. Rising sea levels, shifting weather patterns, and the increased frequency of extreme weather events will all affect maritime transportation infrastructure, elevate navigational risks, and alter shipping routes.

The pandemic prompted a fundamental reassessment of supply chain strategies and dependencies by major economies, including the US. Since 2020, nations have explored various diversification and localisation strategies. This reevaluation has led to a reconsideration of the heavy reliance on China for manufacturing, as countries seek to reduce vulnerabilities and enhance supply chain resilience.

Given this context and in light of accidents such as that at the Francis Scott Key Bridge in Baltimore, it is imperative to take action to mitigate the risks they promote.

First, strict adherence to safety protocols and continuous maintenance work must be prioritised to prevent accidents like the one involving Dali. It has been reported that the vessel experienced apparent electrical issues while still docked, highlighting potential lapses in safety procedures. In contrast, aircraft, whether cargo or passenger, would not be cleared for takeoff if any electrical or mechanical issues were detected.

Second, developing robust contingency plans is crucial for maintaining the resilience of global trade networks. These plans should include measures to address various scenarios, such as natural disasters, conflicts, and technological disruptions. Having backup routes and alternative modes of transportation can help reduce the impact of disruptions on supply chains.

Third, from New Delhi’s standpoint, another challenge emerges with Indian seamen increasingly becoming a significant part of the global shipping industry, trailing only behind the Chinese and Filipinos in numbers. This rise in the participation of Indian seafarers, while a good thing, brings with it the risk of future accidents and potential legal entanglements.

For example, In Baltimore, the US Federal Bureau of Investigation (FBI) has initiated a criminal investigation into the crew of Dali. The Indian crew members remain aboard the vessel during the investigation. Time will tell how this will play out and its impact on the relations between India and the US.

The ship accident causing the collapse of the Francis Scott Key Bridge in the Port of Baltimore was a tragedy, costing the lives of six workers on the bridge, layoffs of thousands of port workers, and serious financial problems for small businesses around the port. Failure to address the serious global trade issues exposed by that accident could lead to even more tragic human, economic, and relationship consequences around the world in the future.

Frank F Islam is an entrepreneur and civic leader based in Washington DC. The views expressed are personal

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