Pete Buttigieg, Secretary of Transport for the United States, has issued a warning of substantial and long-lasting repercussions on supply chains after the indefinite shutdown of Baltimore’s port due to a disastrous bridge collapse on Tuesday. Nonetheless, some specialists indicated this impact might be more sector-specific and regional.
The Francis Scott Key Bridge, a critical conduit in Baltimore’s industrial zone, fell apart in less than a minute after a cargo ship rammed into it during the early hours of Tuesday. This bridge, with a span of over 2 kilometres and four traffic lanes, required nine years to design and almost five years to construct.
After the bridge plummeted into the Patapsco River, six people are feared to have died, and Maryland is now under a state of emergency. Wes Moore, the governor of Maryland, described the calamity as heart-wrenching. The missing individuals were part of a roadworks crew that was fixing potholes on the bridge when it collapsed, and are believed to be from Guatemala, Honduras, El Salvador and Mexico.
The US Occupational Safety and Health Administration, the principal safety authority, labels construction as a high-risk industry, where nearly 50% of workers are of Hispanic origin. In addition to the devastating loss experienced by the families, concerns are being raised about the potential effects on an international economy that is already shaken by the Covid pandemic and the trouble in the Red Sea, which have affected logistics chains.
Joe Biden, the US President, depicted the bridge as a vital pillar for the economy of the northeast US. Its wreckage effectively obstructs access to one of the country’s busiest and most significant ports. In an interview with MSNBC on Wednesday, Buttigieg argued that despite the availability of other ports on the east coast, Baltimore’s port was irreplaceable.
Salvatore Mercogliano, an associate professor of history at Campbell University and presenter of the YouTube channel “What Is Going on With Shipping?”, said ships at Baltimore’s port are currently locked in, which is the most evident immediate outcome. “These vessels are essentially stranded until the bridge is cleared which will certainly not happen for quite some time,” he noted, adding there were also many vessels queued to enter the port.
Baltimore holds the position as the US’s ninth most active port and the primary hub for automobile consignments, processing in excess of 750,000 cars in 2023, as outlined by the Maryland Port Administration’s statistics. Cars and related components made up a significant 42% of all imports entering through the Baltimore port.
Both General Motors (GM) and Ford plan to redirect affected freight, still, Pete Buttigieg has stated there’s no denying the substantial consequences. Throughout 2023, Baltimore port managed international cargo valued at $80 billion (£74 billion), as shared by the governor. Consequently, millions of dollars in trade and tax revenue will be lost per day if ship access is obstructed.
According to Paul Mercogliano, the most major concern will be the impact on coal exports. In 2023, Baltimore came in second in the list of busiest US ports exporting coal, with India being the primary recipient. Ernie Thrasher, CEO at Xcoal Energy & Resources, shared with Bloomberg, a majority of the coal shipment to India is used for generating electricity. He further mentions, the impact on India could outdo global impacts.
While some of the coal will likely be redirected, complicated logistical challenges will limit the amount other harbours can accommodate. Mercogliano states that Baltimore is crucial for coal exportation and redirecting to another facility isn’t a viable alternative. Existing facilities that are equipped to handle coal are already running at capacity, thus the Baltimore port shutdown will massively impact energy-related transport from the US.
President Biden announced that federal funding will cover all bridge reconstruction costs, and he anticipates congressional support for relief efforts. Treasury Secretary, Janet Yellen also confirmed an upcoming federal supply taskforce meeting to evaluate the port shutdown. They are committed to restoring port operations as swiftly as possible.
Outside of port operations, it’s important to highlight the immense reliance the broader community has on the bridge for daily activities, as it sees nearly 12 million vehicles passing through each year.
The port houses Amazon and FedEx’s distribution depots; there is the expectation of probable disturbances in some activities, according to specialists. A representative from Amazon spoke to Newsweek about evaluating the current and potential effects of the bridge calamity. According to Mary Kane, head of the Maryland Chamber of Commerce, the economic damage dealt to Baltimore and the state of Maryland is beyond understanding. (the Guardian)