Connect with us


Baltimore Bridge Collapse to Trigger Logistics Complications, Not Provide Chain Disaster



The catastrophic bridge collapse that closed the Port of Baltimore to ship visitors on Tuesday is inflicting some logistics complications, however is unlikely to set off a significant new U.S. provide chain disaster as competing East Coast ports are poised to deal with extra cargo, economists and logistics specialists say.


With six people presumed dead after a container ship collision destroyed the Francis Scott Key Bridge, it remained unclear how lengthy the span’s twisted superstructure would block the harbor’s mouth.

However port officers from New York to Georgia had been busy fielding queries from shippers about diverting Baltimore-bound cargo from containers to autos and bulk materials.


“We’re prepared to assist. We’ve got ample capability to soak up any surge in container visitors,” Port of Virginia spokesperson Joe Harris advised Reuters.

The Norfolk-based port is predicted to be a significant beneficiary because of its proximity to Baltimore, however ports in Savannah and Brunswick, Georgia, additionally had been poised to soak up some visitors, a spokesperson for the Georgia Ports Authority stated.


U.S. Transportation Secretary Pete Buttigieg advised MSNBC on Wednesday that whereas there have been many ports on the East Coast, “there is no such thing as a substitute for the Port of Baltimore being up and working,” as it’s the high U.S. port for car imports and exports, together with farm and development equipment.

Treasury Secretary Janet Yellen stated a federal supply chain task force was assembly on Wednesday to evaluate the port’s closure however stated the Biden administration “will do every thing as shortly as we probably can” to reopen it.


Provide chain specialists say U.S. port infrastructure is extra resilient than throughout 2021 and 2022, after they had been understaffed and clogged with ships and containers, spiking costs and contributing to inflation as People binged on items purchases throughout the COVID-19 pandemic.

“The collapse of the Francis Scott Key Bridge in Maryland is one other reminder of the U.S. vulnerability to supply-chain shocks, however this occasion could have larger financial implications for the Baltimore economic system than nationally,” Ryan Candy, chief U.S. economist at Oxford Economics, wrote in a notice.


“We don’t anticipate that the disruptions to commerce or transportation shall be seen in U.S. GDP, and the implications for inflation are minimal,” he added.



The impression on the Port of Baltimore’s greater than 2,000 employees who load and unload cargo vessels could possibly be vital if the closure lasts various days.

The dockworkers are day laborers, stated Scott Cowan, head of the Worldwide Longshoreman’s Affiliation Native 333 in Baltimore, that means they solely work when there may be cargo to be moved. He estimated there is perhaps a couple of week’s work clearing the present stock on the port.


After that, the employees might lose a collective $2 million a day in misplaced wages, he stated.

The port directly generates over 15,000 jobs, with a further 140,000 jobs depending on port exercise, in accordance with Maryland Governor Wes Moore’s workplace.



One space of concern is larger cargo prices for imported automobiles and vans and for exports of farm tractors and development gear as Baltimore is the most important U.S. port for “roll-on, roll-off” car shipments, with over 750,000 automobiles and lightweight vans dealt with by state-owned terminals in 2023, in accordance with Maryland Port Administration information.


Ford Motor Co F.N and Basic Motors GM.N stated they might reroute some affected shipments however the impression could be minimal, whereas Volkswagen VOWG_p.DE is unaffected as a result of its new Sparrows Level autos terminal is positioned at a former metal mill web site on the bridge’s Chesapeake Bay facet.

The danger of automotive worth spikes is additional dampened by a restoration in automotive inventories to their highest stage since Could 2020, after being drawn down sharply throughout the pandemic. The trade’s inventory-to-sales ratio is close to its 32-year-average of 1.96 to 1 in accordance with Census Bureau information, and gross sales incentives have risen in latest months as excessive rates of interest dampen demand.



Ryan Peterson, founder and CEO of logistics platform Flexport, stated that with Baltimore dealing with only one.1 million twenty-foot equal containers final yr – rating twelfth within the U.S., any impression on container charges and transport prices from the disruption could be far lower than will increase brought on by cargoes diverted from the Suez Canal due to attacks on Red Sea shipping by the Houthi militant group in Yemen.


However the port outage might contribute to a shift of container visitors to West Coast U.S. ports that was already underway over the previous a number of months due to the shortage Asian shippers’ entry to the Suez route and lowered capability within the Panama Canal because of low water ranges. Peterson stated the potential for an East Coast longshoreman strike in late September – on the top of Christmas-season imports – additionally has some shippers contemplating West Coast shipments.

“East Coast volumes are down and there may be the power for these ports to flex as much as deal with this,” Peterson stated.


(Reporting by David Lawder; extra reporting by Daniel Burns and David Shepardson in New York; Modifying by Stephen Coates and Josie Kao)



Focused on Trucking?

Get automated alerts for this matter.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *