Benzinga - by Neil Dennis, Benzinga Staff Writer.
While search and rescue remains the top priority following the tragic collapse of the Francis Scott Key Bridge in Baltimore early Tuesday, the costs to global trade, markets and industry are already being examined.
The container ship that veered off course and struck the bridge, causing its dramatic and immediate collapse, was the Dali, operated by charter vessel company Synergy Group and chartered by Danish shipping giant AP Moller Maersk (OTC:AMKBY).
Maersk’s shares were down nearly 6% Tuesday, although it was not known whether the company will face any liability over the accident. It issued a statement that read:
“We are closely following the investigations conducted by authorities and Synergy, and we will do our utmost to keep our customers informed.”
East Coast Shipping Hub
Wes MooreMoore issued a statement following the incident. It read: “We are thankful for the brave men and women who are carrying out efforts to rescue those involved and pray for everyone's safety.”
In a statement on the Maryland Port Administration website, it was announced: “Vessel traffic into and out of the Port of Baltimore is suspended until further notice. This does not mean the Port of Baltimore is shutdown. We are still processing trucks inside of our terminals.”
Auto Trade And Supply Chains
There was little market impact on U.S. carmakers General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F), with shares of both automakers trading higher Tuesday.
Shipping lines were likely to be affected, however, creating further problems for global supply chains.
Already under pressure due to lanes through the Red Sea and Suez canal being hit by attacks from Iran-backed Houthi rebels, shipping companies heading for Baltimore will now have to divert to alternative East Coast ports.
Supply side shocks are the “worst thing” that can occur for the Fed and the economy, Citigroup’s Andrew Hollenhorst told Bloomberg, adding that such shocks reduce capacity and increase inflation.
Emily Stausbøll, an analyst at Oslo-based shipping-analytics company Xeneta, said in a statement: “Far East to US East Coast ocean freight services have already been impacted by drought in the Panama Canal and recent conflict in the Red Sea, which saw rates increase by 150%. This latest incident will add to those concerns."
The SonicShares Global Shipping ETF (NYSE:BOAT), which tracks prices of global freight companies, was down slightly on Tuesday morning.
U.S. companies listed within the BOAT ETF include Golden Ocean Group Ltd (NASDAQ:GOGL), a Bermuda-based dry bulk shipper, which fell 1%, and Star Bulk Carriers Corp (NASDAQ:SBLK) which fell 2.3%.
Cruise lines also operate out of Baltimore, with both Carnival Corp (NYSE:CCL) and Royal Caribbean Cruises Ltd (NYSE:RCL) owning major terminals in the port. Shares in both companies were trading a little higher on Tuesday morning.
Now Read: Can Carnival Stock Cruise Higher After Q1 Earnings?
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