Baltimore bridge collapse will likely cause product shortages, supply chain manager warns
Baltimore bridge collapse: Structure engineering professor weighs in
A cargo ship lost power and rammed into a major bridge in Baltimore early Tuesday, destroying the span in a matter of seconds and plunging it into the river in a terrifying collapse that could disrupt a vital shipping port for months. Six people were missing.
The collapse of the Francis Scott Key Bridge in Baltimore, Maryland, early Tuesday morning, could have a huge impact on supply and demand as it’s the country’s busiest port for cars and trucks and the ninth busiest port overall.
The head of a supply chain management company said Americans should expect shortages of goods as the Baltimore bridge collapse affects ocean container shipping and East Coast trucking logistics.
In an aerial view, cargo ship Dali is seen after running into and collapsing the Francis Scott Key Bridge on March 26, 2024 in Baltimore, Maryland. (Tasos Katopodis/Getty Images)
Rerouting and possible price hikes
Even before the collapse, Ryan Petersen, CEO of Flexport, said attacks on cargo ships in the Red Sea connecting Asia with Europe and the United States have forced traffic away from the Suez Canal and around the tip of Africa, causing major backups. At the same time, there’s been increased congestion in the Panama Canal.
He added that U.S. importers are increasingly shifting to West Coast ports, which in turn may have their own back-ups.
"You get this vicious feedback loop," he said.
Petersen was working with his team on Tuesday to reroute about 800 shipping containers currently making their way to Baltimore’s port.
"It’s a scramble because each of those containers has now a new journey to clear customs, you’ve got to get a different truck to pick it up at a different port, it creates a whole lot of downstream work," he said.
The diversions have pushed freight rates from Asia to the U.S. to roughly double what they were before the war, though the prices recently declined to $5,284 per 40-foot container, Levine at Freightos said.
Furthermore, several prominent companies have distribution warehouses or other facilities in an industrial park on the north end of the bridge including Amazon.com and FedEx.
"Aside from the obvious tragedy, this incident will have significant and long-lasting impacts on the region," American Trucking Associations spokesperson Jessica Gail said, calling Key Bridge and Baltimore's port "critical components'' of the nation's infrastructure.
Gail noted that 1.3 million trucks cross the bridge every year — 3,600 a day. Trucks that carry hazardous materials will now have to make 30 miles of detours around Baltimore because they are prohibited from using the city's tunnels, she said, adding to delays and increasing fuel costs.
Consumers could also see price hikes to cover the costs of rerouting while insurance for vessels could also increase, Chloe Demrovsky, the executive in residence in global economy at New York University, told FOX.
RELATED: Baltimore bridge collapse: What's known about the container ship involved
About the Port of Baltimore
The port is one of the smallest on the Northeastern seaboard, handling 265,000 containers in the fourth quarter of last year, Reuters reports. In comparison, the Port of New York and New Jersey handled around 2 million containers in that same period, and Norfolk Port in Virginia handled 850,000.
The port is also popular with cruise liners, with operators including Norwegian, Carnival and Royal Caribbean all using the port for Caribbean, Canadian and other Atlantic destinations, Reuters reports. In 2023, cruises carrying more than 444,000 passengers departed from the port, the Maryland government website says.
What’s more, it is the busiest port in the U.S. for car shipments, handling more than 750,000 vehicles in 2023, according to data from the Maryland Port Administration. It is also the largest U.S. port by volume for handling farm and construction machinery, as well as agricultural products.
It handled a record amount of cargo last year, making it the 20th biggest port in the nation ranked by total tons, according to the Bureau of Transportation Statistics.
As of this report, more than 40 ships remained inside Baltimore port, including small cargo ships, tug boats and pleasure craft, data from ship tracking and maritime analytics provider MarineTraffic shows.
The Associated Press and FOX Business contributed to this report. This story was reported from Los Angeles.