A ‘Significant’ Impact of Baltimore Bridge Collapse

The collapse of the Francis Scott Key Bridge early Tuesday morning has major implications for the Port of Baltimore, supply chains, shippers, trucking companies and consumers. It also offers the port an opportunity to become more competitive, says Thomas W. Derry, CEO of Institute for Supply Management^® (ISM^®).

After leaving the Port of Baltimore (pictured), a large cargo ship, the Dali, lost power and struck one of the support pillars of the bridge, causing it to collapse. The bridge spans the Patapsco River and is part of Interstate 695. Before the incident, the ship’s crew issued a warning, which enabled officials to stop traffic entering the bridge, according to The New York Times. As of 3 p.m. ET, rescue crews were still searching for six people unaccounted for.

Rebuilding the bridge will be a lengthy task, one that will impact traffic to the Port of Baltimore.

Over the last year, there’s been a shift to East Coast ports, after the congestion issues during the coronavirus pandemic at the Ports of Long Beach and Los Angeles, Derry says. East Coast ports — New York and New Jersey; Charleston, South Carolina; Savannah, Georgia; Norfolk, Virginia; and Jacksonville, Florida — have become more competitive and will gain market share while Baltimore is out of commission, he says: “The question for Baltimore: Is that going to be permanent?”

A Crucial Port for Imports Traffic

Because Chesapeake Bay is the most inland of the East Coast ports, it offers easier access to the interior of the country, Derry says. That’s one of the reasons why it’s the largest port for the import of cars and light duty trucks, he adds. And until the bridge is rebuilt, that will impact automotive supply availability: The consumer might find the truck or car they want to buy isn’t as readily available, he says.

The Baltimore port, the 17th largest in the country, also is an important import point for sugar, spices, coffee and gypsum, Derry says. And cruise ships often leave from Baltimore. The city is home to such companies as rail-based transportation supplier CSX and spice giant McCormick.

“So, the impact on the city could be significant,” Derry says. “Also, the local port employees and drayage drivers will be out of work for a while.”

Inbound vessels can reroute to one of the other East Coast ports; however, there will be a few weeks of interruption while shippers work out new shipping and transportation strategies, he says: “As the freight gets rerouted, long-haul truck drivers will move to the other ports.” The rerouting could cause some congestion, but Derry expects that to be resolved quickly.

Baltimore, however, may experience some traffic snags, as large trucks will have to shift to another bridge. A customer advisory from CXS, issued Tuesday morning, stated: “Please be advised that freight shipments in and out of Baltimore are currently delayed due to the tragic collapse of the Francis Scott Key Bridge along I-695 in Maryland. … CSX is working closely with city officials and transportation authorities to ensure the safe and efficient restoration of operations. However, the timeline for returning to normal operations remains uncertain.”

It likely will take years to rebuild the bridge. President Joe Biden pledged federal support: In a statement, he said, “It’s my intention that federal government will pay for the entire cost of reconstructing that bridge, and I expect Congress to support my effort.”

Potential West Coast Activity

The incident could tip more shipping activity back towards the West Coast. “It’ll be interesting to see if the West Coast can then handle the increase in volume again,” Derry says.

Another consideration is that the Panama Canal, the major shipping thoroughfare for east-west traffic and vice versa, has been experiencing drought issues, which has slowed traffic and limited the number of ships traversing it on a daily basis.

The Baltimore port could use the incident as an opportunity to become more competitive, Derry says. Generally, a permanent competitive advantage can be created by digging deeper channels through dredging, adding more marine terminals, using automation and robotics or having more effective offloading to other modes of transportation, he adds.

With the rebuilding of the bridge, a new engineering design could potentially open up the port, turning the long-term delay into a future long-term advantage, he says.

(Photo credit: Getty Images/Halbergman)