United States – The accident involving the bridge collapse that caused a halt in ship movement into and out of the Port of Baltimore might eliminate the chance of a smooth operation of the local economy, disrupt the supply chains, and bring inconveniences to the shippers along the East Coast of America.
During the short period after the collision with the bridge support, the Key Bridge collapsed. Dali was operated by Synergy Group in Singapore but had been chartered to ship by shipping giant Maersk in Denmark before, as reported by CNN.
The Port of Baltimore issued an X stating that vessel activity has been suspended until further notice, but the process is still on-going at its terminals for trucks.
According to Judah Levine, the research head of logistics company Freightos, freight vessel operators actively booked seven scheduled calls in Baltimore until Saturday.
Maersk would not be calling Baltimore any time soon, “We are omitting Baltimore on all our services for the foreseeable future until it is deemed safe for passage through this area.” The spokesperson added. It is going to release the cargo regarded for Baltimore in other ports nearby to avoid unwanted delays.
Baltimore is located near the East Coast of the United States, which makes it a large port in the region, mostly for cars, containers, and commodities. Baltimore has taken first place in US ports in rolling stock handling, with a record high of 850,000 vehicles passing through last year.
“Last year, we received, processed, and shipped approximately 100,000 vehicles through Baltimore for US dealers located in the Northeast and Mid-Atlantic US,” Volkswagen said in a statement, adding that its facility is on the seaboard side of the Key Bridge. “We do not anticipate any impact on vessel operations, but there may be trucking delays as traffic will be rerouted in the area.”
BMW stated that, in addition, its gate port is located close to the harbor entry and, therefore, is accessible. GM (GM) reckons there will be some re-shipping, but eventually, another port will be selected. Toyota said it might affect its export business, but the impact wouldn’t be that bad.
Traffic snarls
Oren Klachkin, a Nationwide Financial markets economist, revealed in a note released on Tuesday that the collapse of this bridge could “throw a wrench into logistics activity from top to bottom just about the entire East Coast.”
Part of that maybe due to traffic jams on Interstate 95 associated with the same corridor, the main artery for traffic along the East Coast of the country.
Although some of 30,000 to 35,000 automobiles and trucks which travel to the Key Bridge everyday can be rerouted through the tunnels, the remaining vehicles will experience traffic delays. And the vehicles that carry hazardous materials which cannot be in the tunnels will be sent for the long detour.
Diverting the cargo to Philadelphia, Norfolk, or the Port of New York/New Jersey may result in a back-up of trucking and rail routes provided that those volumes are significant and, as a result, some congestion may occur at the alternative ports, so said the Levine.
“If some congestion does develop, and vessels are kept waiting, it could cause delays for importers using these ports. Congestion could also put some upward pressure on Asia – US East Coast and transatlantic freight rates,” he added.
Freight cost levels in the transatlantic routes are now approximately at 2019 levels, having soared during the pandemic. However, prices for tours between Asia and the US East Coast are more than twice their March 2019 level as ships moving from Asia to Europe are denied access to the Red Sea route and have to go around Africa rather than through the Suez Canal.
Mark Zandi, chief economist at Moody’s Analytics, said the remainder of the East Coast ports have sufficient capacity for the vessels usually scheduled at Baltimore. However, even if that happens, the unexpected disruption of the ports is still dangerous.
“This removes the margin for error,” he said.
US economy will be spared
Zandi explained that this would only create a marginal increase in the price of shipping. Such is not enough to cause a national disruption as all the goods will be rerouted through other ports.
“This specific event should not appear in the national economic statistics,” he said. “It complicates things. But there’s already a lot of disruptions in the international supply chain.”
Part of the problem is mitigating the unknown consequences of port closures as to how long the port remains shut down.
I do not know now whether the ships will begin sailing to the port by the date provided by the Governor of Maryland, Wes Moore.
“Right now, our exclusive focus is on saving lives; our exclusive focus is on search and rescue,” he said at a news conference.
The passage through the width of the Patapsco River is not that wide, but it is, nevertheless, deep enough to allow big cargo ships such as container ships, cruise ships, and car carriers to pass. This method of clearing the way of debris can let the port, during which other crews will remove the debris that was tossed into the river.
On Tuesday, President Joe Biden promised that the federal government would help open the port as soon as possible, although he also reserved the right to give no specific time frame for that.
“Fifteen thousand jobs depend on that port. And we’re going to do everything we can to protect those jobs and help those workers,” he said.
Rebuilding Baltimore
Therefore, the construction of the bridge could take years — according to the city engineer this is a “long-term build” with no certain deadline yet, but nevertheless, the cleaning up the site could be done much faster, as reported by CNN.
All in all, Baltimore is the ninth largest US port for foreign cargo Shipment. In 2023, it accommodated a record of 52.3 million tons worth USD 80.8 billion. The port, as stated by the government of Maryland, has 15330 direct jobs and 139180 jobs in related services.
Baltimore America’s greatest farm and construction machinery port leads in imports of sugar and gypsum and ranks second in the nation in exports of coal.
“While Baltimore is not one of the largest US East Coast ports, it still imports and exports more than one million containers each year, so there is the potential for this to cause significant disruption to supply chains,” said Emily Stausbøll, market analyst at Norway-based shipping analytics company Xeneta.
A key manufacturer on the scene at the port of Baltimore is Domino Sugar refinery, the 115-year-old industrial facility, which they call the largest refinery of sugar cane in the Western hemisphere. The one that has been around for a very long time, the Domino Sugar sign, is a widely known local landmark in the town.
With the equipment’s help, the refinery converts raw sugar from the ships and refines it into various items. The company refinery’s management did not address questions regarding the current inventory of raw sugar, and neither did they elucidate their operational plan during the port closure period.
In addition to the residential cruise terminal, Baltimore keeps the one for the Royal Caribbean (RCL) and Norwegian (NCLH), Carnival, and Norwegian ships. In 2022, cruise lines transported more than 444,000 passengers from this port, which makes it the most frequented seaport in the world.
The market will watch to see what Carnival Corp. (CCL) says. Its port closure cost for one port could be around USD 10 million, and this would reflect one year of profit.
According to Royal Caribbean, the land-logistics crew was working to possibly commission alternative ports to the ongoing and upcoming excursions of Vision of the Seas and would inform travels through humanities. Updates to guests, including travel partners, after plans have been finalized. Create a custom essay for the given topic. Online influence has become a powerful tool in shaping public opinion during political campaigns, as reported by CNN.
Even if this is an upcoming side effect of the bridge’s repair, the money that will be spent on the bridge restoration will give an overall economic benefit to the area; perhaps it’s a long time in peak.