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M/V Dali Impact and Guidance

April 4, 2024 Avalon

On March 26, 2024, the M/V DALI collided with a bridge pier of the Francis Scott Bridge near Baltimore, causing the collapse of the bridge and the blocking of the shipping channel. The collapse also destroyed and damaged some of the containers on the ship and left a substantial piece of the bridge deck and roadway on its bow. Avalon is saddened about this tragic accident and extend our sympathies to the families and loved ones of the workers who lost their lives on the bridge. We also extend our gratitude to the first responders who are involved in the accident. Our thoughts are with all those affected during this difficult time.

The operation to free the vessel from impingement and to open the channel to container traffic is expected to take at least several weeks and perhaps significantly longer. The M/V DALI will need to be stabilized and towed back to the Port of Baltimore for the offloading and transshipment of the containers aboard (approximately 4,700 cargo laden containers).

There will be numerous claims arising from this incident. The owners of the M/V DALI have already filed a Petition in Federal Court for limitation or exoneration of liability under maritime law. The court will rule on this in due course. It is also anticipated that owners will declare General Average/Salvage.

In addition, several major ocean carriers have issued force majeure notices to their customers regarding containers that were inbound to the Port of Baltimore for import. Those notices essentially advise that these shipments will be rerouted to an alternate port where the carrier will consider the bill of lading terminated. The cost of rerouting and/or final delivery will be the responsibility of the shipper.

Any liability that you may have arising from this matter will depend on your role in the transaction, your terms and conditions of service, and the house and master bill of lading terms for the cargo aboard the M/V DALI and for any cargoes not on the M/V DALI but affected by any force majeure declaration of an ocean carrier.

Should you have specific legal questions, as customary, we recommend that you consult with maritime counsel. If you do not have counsel available, please let us know so we can provide you with a list of law firms that you may wish to hire should you choose to do so.

From an insurance perspective, there are a significant number of variables related to this situation that result in many different liability and insurance coverage scenarios. In many cases, specific answers to coverage questions will need to wait until the situation evolves and formal claims are made. To that end, please notify us if you have cargo aboard the M/V DALI or any other vessels or other modes of transportation affected by this incident, i.e., import and export shipments to and from the Port of Baltimore.

For cargo insured under marine cargo policy, it is imperative that you notify underwriters immediately so they may assist in maintaining coverage during deviation. In some cases, additional premium may be required. It is also imperative that if you receive a force majeure declaration from a steamship line where you acted as an NVOCC, you immediately issue a similar declaration to your impacted shippers.

General Average/Salvage claims are the responsibility of the “merchant” under standard bill of lading terms. If a General Average/Salvage is declared, claims should be forwarded to the insurer of the cargo for that bill of lading. Absent cargo insurance, shippers will need to post cash security in order to retrieve their cargo.

We continue to assess the situation and will make every effort to provide you with further guidance as appropriate. Please contact your local Avalon representative with any questions or if we can be of any assistance during this difficult time.

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The Quest Newsletter is designed to provide critical information in the transportation industry. Avalon Risk Management is not responsible for the accuracy or reliability of information contained in articles. The reader/user assumes all risk in the use of such information.