Key takeaways
- The Port of Baltimore, the nation's leading importer of automobiles, will face extended closures after the Francis Scott Key Bridge collapsed Tuesday.
- The port is the second largest exporter of coal in the country.
- President Joe Biden, citing concerns about traffic and jobs linked to the port, said „the bridge is vital to our economy.”
The tragic collapse of a major bridge in Baltimore on Tuesday could affect automobile imports, coal exports and transportation across the Mid-Atlantic region, although the broader economic effects should be limited, analysts said.
The Francis Scott Key Bridge collapsed early in the morning when it collided with a freighter chartered by Danish logistics provider Maersk ( AMKBY ) that was leaving the Port of Baltimore. Authorities closed the port to shipping following the incident, which did not account for the six people on board and the large amount of debris in the water.
Car and coal exports may be affected
According to Maryland Governor Wes Moore, no other port in the nation brings in more vehicles than Baltimore, with nearly 850,000 cars and light trucks by 2023, the 13th year the facility has led the nation in vehicle imports.
The port also handles large quantities of coal. S&P Global International figures the Port of Baltimore had the second-highest coal shipments in the country in the second quarter of 2023, behind the Port of Norfolk, VA.
The incident has already reduced a large coal production. Pennsylvania-based CONSOL Energy ( CEIX ) said it was delayed due to a Coast Guard security zone in the vehicular access area to its marine terminal at the port. Shares of the company fell nearly 7% on Tuesday.
Biden points to impacts on jobs and transportation
President Joe Biden said the Baltimore bridge is „vital to our economy and our quality of life.” He noted that the port supports about 15,000 jobs and more than 30,000 vehicles pass through the bridge every day.
„As I told Governor Moore, I have ordered my team to move heaven and earth to reopen the port and rebuild the bridge,” Biden told reporters.
JP Morgan analysts see a muted economic downturn
Despite the disruptions, analysts at JP Morgan said the economic effects should be muted.
„Our initial assessment is that this development will have only minimal implications for auto inflation,” JP Morgan analysts Michael Ferroli and Daniel Silver wrote. „Although Baltimore is the most important port for auto imports, many more vehicles are imported by land from Canada and Mexico.”
They pointed to Department of Transportation data showing that the Port of Baltimore ranks 17th in the nation when measured by the total weight of imports.
Their memo said ships were already being diverted to other ports, including the Port of Virginia, and said they had the capacity to handle the additional loads. It is also noteworthy that some auto company terminals are located in areas that were not choked by the bridge collapse, analysts said.