The Baltimore shipping accident: High risks for India

When the container ship Dali crashed into the Francis Scott Key Bridge in Baltimore (USA) on March 26, 2024, killing at least six people and destroying property worth millions of dollars, the shipping and logistics world was thrown into turmoil.

The accident was a spectacular tragedy, captured in a video clip that went viral on YouTube. The fact that it occurred in the United States also made it one of the most high-profile shipping disasters after the Exxon Valdez tanker accident in 1989, which resulted in an unprecedented oil spill off Alaska and in turn sparked extraordinary changes in shipping regulations and industry practices, as well as increased awareness of marine pollution.

Why the country is a player in the industry

Unlike in the past, India has become a major player in global shipping, with its seafarers manning many of the ocean-going vessels and bringing in important foreign exchange in the form of remittances. Remittances from Indian seafarers typically account for about 15% of all foreign direct investment that flows into the country every year. Although the levers of power in global shipping and ship building, ownership and financing remain outside the domain of India and Indians, India is inevitable in maritime events as a source of seafarers and as a ship manager. This is also the case with the Dali, whose crew is almost entirely Indian.

Insurance experts have said the Dali accident will match or exceed the highest ever marine insurance payout of $1.5 billion in the case of the 2012 capsizing of the Costa Concordia cruise ship. The expected large payout in the Dali case is due to the loss of life, property and business also caused by the closure of the busy port of Baltimore. Synergy Maritime Group, the Singapore-based manager of Dali, is a company founded and largely run by Indians but operates globally. With a major operation in Chennai, it employs thousands of Indian seafarers and is an Indian success story in global shipping, with management of more than 650 vessels.

Although Synergy and the shipowner will not receive a $1.5 billion bill, and the actual payment will be borne by the insurers and a coalition of over 80 reinsurers, there may well be financial consequences for Synergy, particularly if it turns out that the managers failed or avoided maintaining the equipment in proper working order, which in turn led to the collision.

Synergy’s rapid rise is due to the trust it enjoys among shipowners to operate their vessels smoothly and safely, in accordance with regulations, at optimal costs. And that trust, which has helped Indian seafarers secure lucrative jobs, is in danger of eroding.

Indian seafarers in global shipping are Indians – representatives of a nation. And their actions inevitably, if unfairly, reflect on India as a whole.

The captain of the Costa Concordia was considered a disgrace to the profession. His final act of shame was to abandon ship prematurely, despite the fact that the Merchant Shipping Convention stipulates that the captain must be the last to leave his ship. Francesco Schettino, however, was seen as an individual deviant and not as a representative of the Italian people.

The interim report by investigators on the Dali accident also addressed the causes of two onboard power outages that occurred in Baltimore Harbor just 10 hours before departure. One of the causes appears to have been a botched operation by a seaman. It is quite possible that the final report will identify botched or incorrect operations by the ship’s crew as a contributing factor or even the cause of the two power outages that led to the ship’s loss of steering control and propulsion power and ultimately to the collision.

This would call into question the competency and certification of Indian seafarers, which form the backbone of Indian seafarers’ fitness to work. Most seafarers would attest to the stringent Indian process that ensures that only thoroughly trained and knowledgeable persons are certified for various ship operations.

Fast movements

The Indian government acted swiftly in the Dali case to prevent hasty and unjustified damage to the reputation of Indian seafarers and successfully prosecuted India as a State of Substantial Interest under the International Maritime Organization’s Code of Investigation of Accidents.

Indian maritime officials are participating in the on-site investigation and will have an opportunity to review the final report, provide comments and challenge any unjustified damage to the reputation of Indian seafarers before it is made public.

There are many contradictions in the Dali accident. A natural event may not necessarily guarantee a high insurance payout. For that to happen, one must identify the guilty parties. At the same time, the US government has involved Indian officials in the investigation.

Shortly after the accident, US President Joe Biden praised the Indian sailors on the Dali who, after losing control of the ship, immediately alerted the authorities so that they could close the bridge. Although it eventually turned out that the Dali’s navigators were acting according to the instructions of the American pilot on board, Biden’s intention was clear. He wanted to suppress anti-Indian sentiments.

M. Kalyanaraman is a certified marine engineer and journalist