Collapse of Baltimore's Francis Scott Key Bridge causes travel hubs
The collapse of the Francis Scott Key Bridge in Baltimore is expected to significantly affect travel, including shipping.
The economic impact of the collapse of the Francis Scott Key Bridge in Baltimore — which left six people dead and one seriously injured — could be enormous.
The immediate price tag: $2 million a day in wages and 8,000 jobs, says Transportation Secretary Pete Buttigieg.
„Reconstruction is not going to be quick or easy or cheap,” Buttigieg told reporters at the White House on Wednesday.
The region is an important one for the US economy. Ranked as the largest vehicle handling port in the United States, the Port of Baltimore offers Maryland's deepest port. Chesapeake Bay. The port is closer to the Midwest than any other East Coast port Baltimore One-third of the country's population is on overnight trips.
Between $100 million and $200 million in cargo passes through the port every day. As it stalls, many longshoremen could be out of a job, ButiGeek warned this week.
„About $2 million in wages … is at risk every day. That's one of the areas we're most concerned about,” the transportation secretary explained.
„These longshore workers, if things aren't moving, they're not working,” he added.
are companies Coping with tragic disaster By transferring cargo to other East Coast ports. About 4,000 commercial trucks use the bridge a day, according to Oxford Economics, and the detours are expected to increase delivery times and fuel costs.
At present, work is underway on the bridge to pick up some of the vehicles stuck in traffic and bring them back to surface transport to go to other destinations.
A key answer
The bridge collapsed around 1:30 a.m. on Tuesday when a massive container ship, about 985 feet long, collided with it.
Buttigieg said the Coast Guard will coordinate with the Army Corps of Engineers to clean up and reopen the channel. However, he did not immediately provide a timeline for reopening the port or rebuilding the bridge, which took five years to complete in the 1970s.
President Joe Biden has called for the federal government to pass a bill to rebuild the bridge, which Congress must approve.
But that shouldn't be a deterrent to starting work soon, Butieck said Wednesday. The Bipartisan Infrastructure Act, a major piece of legislation targeting America's infrastructure signed into law in 2021, has provided funding for the Department of Transportation's emergency relief program.
The Port of Baltimore is the 10th largest in the United States by container imports, according to Moody's Analytics. It is the number 1 port in the country for vehicles. Last year, it handled 847,158 cars and light trucks, according to Maryland Gov. Wes Moore's office.
The facility handles 1.3 million tons of farm and construction machinery, the most of any port in the country, and employs about 15,000 workers.
Will the Baltimore bridge collapse cause supply chain disruptions or price increases?
Oxford Economics does not expect the restructuring to have any impact on the country's $28 trillion economy or economic growth this year. Experts at both Oxford and JP Morgan Chase said they expect the changes to raise prices, particularly for vehicles, but the effects should be „minimal”.
Still, other supply chain experts said the catastrophic episode could mean significant challenges.
On the East Coast, ports in New York only; Newark, New Jersey, and Jacksonville, Florida, have the capacity to handle farm and construction machinery and diverted vehicles flowing through Baltimore, said Chris Tang, faculty director of the Center for Global Management at the University of California, Los Angeles. .
However, docks at those ports are already overflowing with imported cars and light trucks due to slow sales of electric vehicles and SUVs in the United States.
„They have to move them out of the docks because there's no room,” he said.
To relieve the logjam, manufacturers or dealers could offer incentives to car buyers to boost sales and move vehicles from dealer lots, making room for those diverted from Baltimore, Tang noted.
As a result, while prices may increase for some vehicles, others may be discounted. Tang also suggested that the Biden administration could offer subsidies to manufacturers and distributors to provide incentives.
At the same time, many ports are still stocked with vehicles from Detroit automakers bound for Europe, Tang said. They should also be sent to make room for diverted cars.
For consumers ordering some new cars, delivery delays of several weeks require planning and negotiations.
„Whether there is a delay depends on the make and model of the vehicle,” said Nathan Strong, director of ocean freight for supply chain management firm Flexport.
Auto production could also be halted as parts shipped through Baltimore to U.S. assembly plants will be diverted, Strong said. As the pandemic subsides, most manufacturers have returned to just-in-time inventory, which means limited supplies of parts and materials.
But it's not just vehicles. Sugar exports could be another challenge as recovery efforts begin in Maryland. The Domino Sugar Refinery is located in Baltimore's Inner Harbor. Tang says the diversion of bulk imported sugar through other East Coast ports will increase distribution costs and raise prices for consumers.
For now, Domino's says it has enough inventory to handle at least a month's worth of disruptions, economists Adam Kamins and Colin Seitz of Moody's Analytics wrote in a note to clients.
However, industries have been hit hard. The Port of Baltimore is very busy importing gypsum, a material used in drywall, and handles significant shipments of lumber bound for the United States.
According to the authors, “extended disruptions can make building very expensive.
The port is also the second largest port in the US especially for coal exports to India.
„Extended disruption to this port would mean a supply shock that would extend to Asia and reverberate through global supply chains,” the economists wrote.
Buttigieg said Wednesday that he has a reminder for any member of Congress on the fence about funding requests as experts grapple with the economic impact of Baltimore's collapse:
„Today it's happening in Baltimore, tomorrow it could be your district, and we really need to stand together in red, blue and purple to make these things happen.”
Swapna Venugopal Ramasamy is the US White House Correspondent today. You can follow her on X @SwapnaVenugopal