Happy Friday! This bridge collapse will have huge repercussions in the MD area. It’s been a while since we raided the mailbag, so let’s get right into it.

Accidentally On Purpose?

You promised to eat crow if you were wrong; I hear Tabasco helps. It appears the ship lost power twice, the international crew sent a Mayday, and traffic was stopped. Not a likely terrorist scenario but the bridge is still closed, traffic must re-route, shipping has stopped until the passage is clear, and losses will ripple through the economy. If prevention and remediation are considered "nanny state", at the very least, let's put some teeth in fines and bankruptcy laws, for any accidents that prove to be negligence-based. Perhaps a public execution of corporate executives, and/or the captain of the ship, would be cost-effective as well as motivational?

Damon C. 

I’m a 1975 Marine Engineer graduate from the US Merchant Marine Academy and I’ve been in touch with my classmates all day about this accident. Power/steerage failures on both steam- and diesel-powered ships are not at all rare. The power failure was followed relatively quickly by a restart (lots of black smoke from a struggling restart) and a clear effort to back down the ship’s forward momentum can be seen in the videos (typically not shown by the MSM). This looks like an accident, and while I appreciate the heads up for potential terrorist attacks, please do a little more homework before starting terrorist fear-mongering. We have enough of that in this world as it is. Otherwise, great reporting and I love reading your work.

Keene L.

Damon and Keene, thank you for writing in. Here’s me doubling down.

First, Keene, your assessment agrees entirely with one of Maersk’s former Chief Engineers.

I don’t dispute it.

And your assertion that power outages happen more often than we’d believe is also correct. The Maritime Executive reads:

The probability of power loss in ship electric propulsion systems (SEPS) is estimated to be around 0.07, meaning there is a 7% chance of SEPS power loss occurring. Power loss in the propulsion system is a major risk factor leading to accidents, with over 700 such accidents happening in recent years.

That’s far higher than I would’ve thought.

Now, how many times has a bridge collapsed because it was hit by a ship?

According to this AP article, from 1960 to 2015, there were 35 major bridge collapses worldwide due to ship or barge collisions, with 18 incidents occurring in the United States.

I asked Perplexity to turn this into a probability. This is what it returned:

Based on the details provided in the search results:

From 1960 to 2015 (a 55-year period), 18 major bridge collapses in the United States were caused by ship or barge collisions.

To calculate the probability:

Total number of major bridges in the US over the 55-year period:

The search results do not provide the total number of major bridges in the US during this time. Without this information, we cannot determine the exact probability.

Estimated probability:

Assuming thousands of major bridges are in the US, 18 collapses due to ship/barge impacts over 55 years suggest this is a relatively rare event.

A rough estimate would be a probability of less than 0.1% (1 in 1,000) of a major US bridge collapsing due to a ship or barge collision in any given year.

So, the estimated probability of a ship losing power and taking out a bridge is 7% x 0.1% = 0.007%.

To compare, the lifetime odds of getting hit by lightning is 1 in 15,300 or 0.00653%.

That would make this a really freak accident.

However, you’re right: I’m not an engineer. But most people in the finance game like I am are great at pattern recognition.

Terrorist attacks don’t necessarily mean machine guns and mercenaries. In fact, I’m leaning heavily towards a cyberattack.

I watched this clip of the ship at 8x speed. Someone (or some computer) undoubtedly steered that ship into the bridge support. But the boat had its harbor pilots onboard and steering. Indeed, these highly trained individuals didn’t steer the ship into the bridge.

And yet, John Zimmerman, an ironworker who helped build the bridge in the 1970s, speculated based on the footage that the ship struck the bridge at its most vulnerable point: “It looks like it hit the only spot it could have hit to take the whole thing down.”

Here are a few other fishy things:

• What’s the busiest highway in the United States? I-95.
• Which bridge in the US has few dolphins or fenders protecting its columns? The Key Bridge.
• What’s the approved hazmat and military route around Baltimore? The Key Bridge.
• Where will they go now? The other way around is more inland. Or, they’ll get special permission to truck hazmat under Baltimore via the Harbor Tunnel.
• The US automotive industry depends on Baltimore’s port.
• Why did Janet Yellen immediately say the US Treasury would pay for the collapse? Indeed, that’s the job of the boat’s insurance company. It's very fishy indeed. Later, she walked back those comments.
• The harbor is now blocked, not just the highway path.

Could this be Russia, China, Iran, or one of the millions of illegals crossing the border agitating? I think so.

Dear Sean,

I'm sure you were spot on with your analysis of the key bridge "attack." But the Chinese don't say, "May you live in interesting times," ironically. They say it as a curse!!

Best regards,

Martin

Long-term HK resident

Thanks, Martin.

Wrap Up

Again, there’s no definite answer as yet. But I still prefer a cyberattack scenario to a freak accident one.

This month’s asset class report will be with you on Monday.

In the meantime, have a wonderful Easter!