The MV Dali is a container vessel named for the surrealist painter Salvador Dali. He was famous for breaking down normal images in striking ways. In Dali paintings, clocks melt and other familiar structures lose all recognizable form. The Dali’s name turned out to be prophetic on the early morning of March 26 when it dismantled Baltimore’s Francis Scott Key Bridge in spectacular fashion.
After the container ship reportedly lost power multiple times and the crew took countermeasures to try to stop or at least slow down, it rammed into one of the bridge’s piers at about 1:30 am. The Dali is a vessel that weighs 95,000 tons when empty, and it was not empty.
The resulting collision on camera appears to be happening almost in slow motion because of the ship dragging anchor. It produced what is called a cascading failure, and much of the bridge tumbled into the water in seconds. The collapse brought all ship traffic to and from Baltimore Harbor, and obviously all bridge traffic, to a halt.
The toll for this accident is a significant one, starting with the loss of life. Six construction workers, who were fixing potholes at a time when the bridge had lighter traffic, died.
Two more Maryland transportation workers were injured in the cascading failure. One worker on the Dali, crewed by Indians and bound for Colombo, Sri Lanka, was also hospitalized.
Then there is the cost of port and traffic disruptions that President Joe Biden laid out on the day of the disaster.
“The Port of Baltimore is one of the nation’s largest shipping hubs,” Biden said from the White House, after consulting the Maryland congressional delegation. “It handled a record amount of cargo last year. It’s also the top port in America for both imports and exports of automobiles and light trucks. Around 850,000 vehicles go through that port every single year. … Fifteen thousand jobs depend on that port.”
All Baltimore port traffic ground to a halt while different government agencies worked to clear away the bridge debris. One week after the accident, workers had managed to establish two limited channels that allowed some small vessels to sail in and out of the harbor.
A third channel, one allowing larger vessels passage, may open soon, though it’s hard to say. The scale of the debris is reportedly giving work crews fits. Divers are having to use sonar to feel their way around it.
The bridge itself is also economically vital, according to the president’s estimation.
“The bridge is also critical … for travel, not just for Baltimore but for the Northeast Corridor,” Biden said. “Over 30,000 vehicles cross the Francis Scott Key Bridge on a daily basis. … It’s one of the most important elements for the economy in the Northeast and the quality of life.”
And thus, Biden added, “It’s my intention that federal government will pay for the entire cost of reconstructing that bridge, and I expect … the Congress to support my effort.”
Paying the bridge toll
Estimates of how much it will cost to replace the bridge and how long it will take are all over the map. The price tags being thrown around are between $400 million and $800 million, with length of construction ranging from 18 months to well north of two years.
Whether or not the federal government picks up the total tab for that bridge is ultimately up to Congress, which has the power of the purse, not Biden. Some funds are available to the president because of previous appropriations. The administration was able to send $60 million to Maryland in emergency relief with no fuss, for instance. Yet there are reasons to think that full funding might not float with the current Congress.
Rep. Dan Meuser (R-PA), a former businessman, called it “kind of outrageous, immediately, for Biden to express in this tragedy the idea that he’s going to use federal funds to pay for the entirety,” during a March 28 Fox Business segment.
Outrage was duly expressed by progressive critics on social media over Meuser’s statement. Yet part of his message, the emphasis on “entirety,” has resonated with the broader center-right policy world.
“There is nothing new about federal funding to help states with emergency repairs to highway infrastructure,” the conservative magazine National Review editorialized on April 3. “But Biden did not only promise help. He promised to pick up the tab. Not only should federal taxpayers not be on the hook for the entire repair process, Congress should not allocate a single penny of additional funding beyond what is already available.”
That same editorial also argued, “It should be a long-term goal of federal policy to have states fully fund the highways they already own and operate,” very much including Maryland’s Francis Scott Key Bridge.
Maryland Public Policy Institute President Christopher Summers chimed in with ways that the state legislature might free up more funds to, at the very least, deal with the economic fallout from the bridge falling down.
“End the state takeover of the Pimlico Race Course, choose the bus rapid-transit alternative to the Red Line light rail project, and end the $40 billion Kirwan Commission Blueprint for Maryland’s Future education spending plan,” Summers suggested in a statement.
He added, “Considering that we have no way of knowing how big of a detriment the bridge collapse will be to the region’s economy or how long it will take to build a new bridge, it is beyond imprudent to continue wasting taxpayers’ hard-earned money on these projects.”
Republicans in Maryland’s upper chamber have also introduced Senate Bill 1187. The legislation would expand Gov. Wes Moore’s (D-MD) emergency powers to bypass construction-related red tape. This could both speed up bridge reconstruction and drive its costs down.
Specifically, the bill description says it would “authoriz[e] the Governor to suspend State or local law if necessary for the restoration, repair, or replacement of critical infrastructure related to a declared state of emergency” for up to a year. That is up from the state’s current 90-day limit on emergency declarations.
After Baltimore, an insurance hike?
Insurance and reinsurance companies are likely encouraged by anything that can break the logjam sooner and get the ships and cars flowing again.
That’s because shipping is a heavily insured industry. All parties from the Dali to the Port of Baltimore here are insured, for things ranging from collisions to loss of business due to a bridge falling down. That is all going to make for massive covered losses and lawsuits over those losses. Estimates range between $2 billion and $4 billion for what insurance and reinsurance companies will have to cough up.
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Bruce Carnegie-Brown, chairman of mega reinsurer Lloyd’s of London, predicted “potentially the largest-ever marine insured loss” on CNBC, though he quickly added that these losses would not fall “outside parameters that we plan for.”
Parameters or not, large covered losses tend to lead to higher rates. Some analysts are predicting a general global hike in maritime insurance following the Baltimore disaster. If so, that would bump up the cost of shipped goods worldwide.
