Black vessel is definitely altering course to the wrong side of the channel and cutting across the path of the red vessel, which is left with no place to run and no time to stop.
The sole question is why did it happen.
Many possibilities exist, such as power failure with no time for helmsman to switch to secondary steering system; steering gear malfunction - mechanical to the ship; steering gear malfunction -external (that is they accidentally dredged something that was in the canal, a car, a steel wire cable, etc); human error, such has helmsman going the wrong way on an ordered course correction; human factor, non-error related, such as helmsman having a hearth attack; etc.
My guess is that something went wrong on the black ship, limiting the amount of control they had. When his stern got to close to the side of the canal, bank suction started taking effect and pulled the stern closer to the bank, forcing the bow towards the other ship. The other ship had not a lot of options, either take it on the bow or amidships and the bow means less damage. Judging by the damage i would say the red ship had already reduced speed as much as possible and still retain steerage.
all welland traffic has to carry a pilot I believe and they do maintain constant communication with each other and with traffic control. I suspect the tapes will tell the story or at the very least, provide some very interesting reading. Any bets that Heddle has suddenly received some summer business? A full inspection of both hulls will certainly be demanded at the very least.