Baltimore, Maryland – Carnival, a major cruise operator, issued a warning regarding the potential impact on its financial performance due to the collapse of the Francis Scott Key Bridge in Baltimore. The company revealed that this incident could lead to significant financial losses, estimated to be up to $10 million, affecting both adjusted EBITDA and adjusted net income for the year 2024.
As a result of the bridge collapse, Carnival announced a temporary relocation of its operations from Baltimore to Norfolk, Virginia. This decision necessitated the rerouting of the Carnival Legend, scheduled to return from a voyage, causing disruptions in the company’s itinerary.
The collapse of the bridge has not only affected Carnival but also triggered a series of re-routes for vessel traffic in and out of the Port of Baltimore, leading to a suspension until further notice. The CEO of Flexport, Ryan Petersen, expressed concern over the situation, mentioning the challenges of identifying alternative drop-off locations for over 800 containers bound for Baltimore.
Petersen highlighted the logistical difficulties faced by companies like Flexport in managing the aftermath of the bridge collapse, emphasizing the need for swift action to mitigate disruptions in shipping operations. The redirection of vessel traffic to other ports, such as Norfolk, New York, and Philadelphia, requires careful coordination to prevent a significant backlog in cargo delivery.
In addition to the bridge incident, disruptions in sea-bound operations have been a common occurrence this year, stemming from various factors like attacks on vessels in the Red Sea and congestion near the Panama Canal. These disruptions have led to increased transport costs, impacting the shipping industry as a whole. Petersen emphasized that the rise in costs associated with re-routes could potentially affect the prices of goods for consumers in the long run.
Overall, the collapse of the Francis Scott Key Bridge has not only posed immediate challenges for companies like Carnival and Flexport but also highlighted the vulnerabilities of the global supply chain. As businesses navigate through these unforeseen disruptions, they must adapt quickly to ensure minimal impact on their operations and financial performance.