Business
Baltimore bridge collapse: power outages caused the ship’s engine to stall before the crash
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The cargo ship Dali experienced electrical blackouts about 10 hours before leaving the Port of Baltimore and yet again shortly before it slammed into the Francis Key Bridge and killed six construction workers, federal investigators said Tuesday, providing the most detailed account yet of the tragedy.
The power outage occurred after a crewmember mistakenly closed an exhaust damper, causing the ship’s engine to stall, investigators with the National Transportation Safety Board said in their preliminary report. Shortly after leaving Baltimore early on March 26, the ship crashed into one of the bridge’s supporting columns because another power outage caused it to lose steering and propulsion at the exact worst moment.
The report provides new details about how the ship’s crew addressed the power issues it experienced while still docked in Baltimore. A full investigation could take a year or more, according to the safety board.
Testing of the ship’s fuel did not reveal any concerns related to its quality, according to the report.
The Dali was headed from Baltimore to Sri Lanka, laden with shipping containers and enough supplies for a monthlong voyage.
After the initial blackout caused by the closed exhaust damper, investigators say a backup generator automatically came on. It continued to run for a short period—until insufficient fuel pressure caused it to kick off again, resulting in a second blackout. That’s when crewmembers made changes to the ship’s electrical configuration, switching from one transformer and breaker system it had been using for several months to another that was in use upon its departure, according to the report.
Investigators stopped short of drawing a direct line between those earlier power issues and the blackout that ultimately caused the bridge collapse.
“The NTSB is still investigating the electrical configuration following the first in-port blackout and potential impacts on the events during the accident voyage,” investigators wrote.
The safety board launched its investigation almost immediately after the collapse, which sent six members of a roadwork crew plunging to their deaths. Investigators boarded the ship to document the scene and collect evidence, including the vessel’s data recorder and information from its engine room, according to board chair Jennifer Homendy. Investigators also interviewed the captain and crew members.
“Our mission is to determine why something happened, how it happened and to prevent it from recurring,” Homendy said at a news conference days after the disaster.
The preliminary report details the chaotic moments prior to the bridge collapse while crewmembers scrambled to address a series of electrical failures that came in quick succession as disaster loomed.
At 1:25 a.m. on March 26, when the Dali was a little over half a mile away from the bridge, electrical breakers that fed most of the ship’s equipment and lighting unexpectedly tripped, causing a power loss. The main propulsion diesel engine automatically shut down after its cooling pumps lost power, and the ship lost steering.
Crewmembers were able to momentarily restore electricity by manually closing the tripped breakers, the report says.
Around that time, the ship’s pilots called for tugboats to come help guide the wayward vessel. The tugboats that guided it out of the port had peeled off earlier per normal practice, according to the report. Crewmembers also started the process of dropping anchor, and the pilots’ dispatcher called the Maryland Transportation Authority Police and relayed that the ship had lost power. The pilots’ dispatcher notified the Coast Guard.
The ship was less than a quarter-mile from the bridge when it experienced a second power blackout because of more tripped breakers, according to the report. The crew again restored power, but it was too late to avoid striking the bridge.
One of the pilots ordered the rudder turned at the last minute, but since the main engine remained shut down, there was no propulsion to assist with steering, the report says. They also made a mayday call that allowed police to stop traffic to the bridge.
At 1:29 a.m., the 1.6-mile steel span came crashing down into the Patapsco River. The workers were sitting in their vehicles during a break when disaster struck.
The last of the victims’ bodies was recovered last week.
One member of the seven-person crew survived the collapse by somehow freeing himself from his work truck. He was rescued from the water later that morning. A road maintenance inspector also survived by running to safety in the moments before the bridge fell.
On Monday, crews conducted a controlled demolition to break down the largest remaining span of the collapsed bridge, which landed draped across the Dali’s bow, pinning the grounded ship amid the wreckage. The damaged ship is expected to be refloated and guided back to the Port of Baltimore in the coming days.
It arrived in the U.S. from Singapore on March 19, a week before the crash, according to the report. It made stops in Newark, New Jersey, and Norfolk, Virginia, before coming to Baltimore. Investigators said they were not aware of any other power outages occurring in those ports.
They said they’re working with Hyundai, the manufacturer of the ship’s electrical system, to “identify the cause(s) of the breakers unexpectedly opening while approaching the Key Bridge and the subsequent blackouts.”
The board’s preliminary report released Tuesday likely includes a fraction of the findings that will be presented in its final report, which is expected to take more than a year.
The FBI has also launched a criminal investigation into the circumstances leading up to the collapse.
Business
Russia economy: Relying more China’s yuan is backfiring
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After the U.S. and its allies sanctioned Russia in 2022 for its invasion of Ukraine, Moscow turned away from the dollar and euro in international transactions and relied more on China’s yuan.
That coincided with more trade between the two countries as Russia was largely shut out of Western markets as well as the global financial system.
By June, the yuan accounted for 99.6% of the Russian foreign exchange market, according to Bloomberg, which cited data from Russia’s central bank. And Russian commercial banks ramped up corporate loans denominated in yuan.
But this dependence on the yuan is now backfiring as top Russian banks are running out of the Chinese currency, Reuters reported on Thursday.
“We cannot lend in yuan because we have nothing to cover our foreign currency positions with,” German Gref, CEO of top Russian lender Sberbank, said at an economic forum.
That’s because the U.S. expanded its definition of Russia’s military industry earlier this year, thereby widening the potential scope of Chinese firms that could get hit with secondary sanctions for doing business with Moscow.
As a result, Chinese banks have been reluctant to transfer yuan to Russian counterparts while servicing foreign trade payments, leaving transactions in limbo for months. With yuan liquidity drying up from China, Russian companies have tapped the central bank for yuan via currency swaps.
At the start of this month, banks raised a record 35 billion yuan from Russian’s central bank through these swaps, according to Reuters. And banks were expecting more help.
“I think the central bank can do something,” Andrei Kostin, CEO of second-largest bank VTB, said Thursday. “They hopefully understand the need to increase the liquidity offer through swaps.”
But on Friday, Russia’s central bank dashed those hopes, calling on banks to curb corporate loans denominated in yuan.
The Bank of Russia also said in a report that swaps are only meant for short-term stabilization of the domestic currency market and are not a long-term source of funding, according to Bloomberg. But rather than simply filling the roles that dollars and euros did, yuan loans have expanded.
“The increase in yuan lending was partly caused by the replacement of loans in ‘toxic’ currencies, but 41% of the increase was down to new currency loans,” the bank said.
The central bank also released a survey that showed a quarter of Russian exporters had trouble with foreign counterparts, including blocked or returned payments even when dealing in supposedly friendly countries. And about half of exporters said the problems got worse in the second quarter from the prior quarter.
The overall Russian economy has been propped up by the government’s wartime spending as well as oil exports to China and India. But the combination of busy factories and labor shortages due to military mobilizations have stoked more inflation.
Researchers led by Yale’s Jeffrey Sonnenfeld warned the seemingly robust GDP data mask deeper problems in the economy.
“Simply put, Putin’s administration has prioritized military production over all else in the economy, at substantial cost,” they wrote. “While the defense industry expands, Russian consumers are increasingly burdened with debt, potentially setting the stage for a looming crisis. The excessive focus on military spending is crowding out productive investments in other sectors of the economy, stifling long-term growth prospects and innovation.”
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Business
ETFs are set to hit record inflows, but this wild card could change it
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Exchange-traded fund inflows have already topped monthly records in 2024, and managers think inflows could see an impact from the money market fund boom before year-end.
“With that $6 trillion plus parked in money market funds, I do think that is really the biggest wild card for the remainder of the year,” Nate Geraci, president of The ETF Store, told CNBC’s “ETF Edge” this week. “Whether it be flows into REIT ETFs or just the broader ETF market, that’s going to be a real potential catalyst here to watch.”
Total assets in money market funds set a new high of $6.24 trillion this past week, according to the Investment Company Institute. Assets have hit peak levels this year as investors wait for a Federal Reserve rate cut.
“If that yield comes down, the return on money market funds should come down as well,” said State Street Global Advisors’ Matt Bartolini in the same interview. “So as rates fall, we should expect to see some of that capital that has been on the sidelines in cash when cash was sort of cool again, start to go back into the marketplace.”
Bartolini, the firm’s head of SPDR Americas Research, sees that money moving into stocks, other higher-yielding areas of the fixed income marketplace and parts of the ETF market.
“I think one of the areas that I think is probably going to pick up a little bit more is around gold ETFs,” Bartolini added. “They’ve had about 2.2 billion of inflows the last three months, really strong close last year. So I think the future is still bright for the overall industry.”
Meanwhile, Geraci expects large, megacap ETFs to benefit. He also thinks the transition could be promising for ETF inflow levels as they approach 2021 records of $909 billion.
“Assuming stocks don’t experience a massive pullback, I think investors will continue to allocate here, and ETF inflows can break that record,” he said.
Business
Tens of thousands in South Korea protest lack of climate progress By Reuters
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By Sebin Choi and Daewoung Kim
SEOUL (Reuters) – More than 30,000 protesters gathered in South Korea’s capital in broiling heat on Saturday, demanding more aggressive action by the government to combat global warming.
With temperatures exceeding 30 degrees Celsius (86 degrees Fahrenheit), protesters young and old marched in the country’s biggest demonstration so far this year, snarling traffic in central Seoul.
They waved large banners reading “Climate justice,” “Protect our lives!” and “NO to climate villain (President) Yoon Suk Yeol’s administration”.
“Truth is, without the air conditioner this summer was not liveable and people could not live like people,” said Yu Si-yun, an environmental activist leading the protest.
“We are facing a problem not unique to a country or an individual. We need systemic change and we are running out of time to act.”
Organised by the 907 Climate Justice March Group Committee, the protest followed a ruling last month by South Korea’s top court that the nation’s climate change law fails to protect basic human rights and lacks targets to shield future generations.
The 200 plaintiffs, including young climate activists and even some infants, told the constitutional court that the government was violating citizens’ human rights by not doing enough on climate change.
South Korea, which aims to be carbon-neutral by 2050, is the biggest coal polluter after Australia among the Group of 20 big economies, with a slow adoption of renewable energy. The government last year lowered its 2030 targets for curbing industrial greenhouse-gas emissions but kept its national goal of cutting emissions by 40% from 2018 levels.
Even South Korea’s kimchi has fallen victim to climate change. Farmers and manufacturers say the quality and quantity of the napa cabbage used in the ubiquitous pickled dish is suffering due to intensifying heat.
“Feel how long this summer is,” said Kim Ki-chang, a 46-year-old novelist who was participating in the protest for a third straight year.
“This would be a much bigger threat and survival issue to younger generations than the older ones, so I think the older generation should do something more actively for the next generation.”
Seoul has had a record 20 consecutive nights defined as “tropical”, with low temperatures remaining above 25 C (77 F).
Protest organising committee member Kim Eun-jung said the demonstrators chose the popular Gangnam financial and shopping area this year, not the Gwanghwamun area they used last year, to have their voices heard by the many big corporations there that the group blames for carbon emissions.
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