The Port of Baltimore has been crippled by the collapse of the Francis Scott Key Bridge, posing a risk to the U.S. economy of further inflation, reduced production capacity, and widening government deficits.
The Port of Baltimore was the 17th busiest port in the nation by gross tonnage in 2021. Latest data Available from the Bureau of Transportation Statistics. On the East Coast, he is the fifth largest port, larger than the ports of New York and New Jersey. Virginia. Mobile, Alabama. and Savannah, Georgia.
Gov. Wes Moore announced last year that the port would handle a record 52.3 million tons of foreign cargo in 2023, worth $80 billion. This was the best ever.
Moore described the port as “one of the largest economic generators” in Maryland.
According to the governor’s office, it was a first in terms of transportation volume of cars and light trucks (including 847,158 passenger cars and light trucks), large roll-on/roll-off agricultural and construction machinery, imported sugar, imported gypsum, etc. That’s what it means.
It ranked ninth overall in foreign cargo volume and ninth in foreign cargo value, Moore said.
Port closures could cause severe supply chain disruptions for both consumer goods and industrial imports used in products manufactured in the United States. It is unlikely that other ports on America’s East Coast will be able to absorb all of the lost capacity.we
This raises the risk of further inflation in the U.S. Inflation is down from the very high levels seen in the first two years of the Biden administration, but remains elevated by historical standards. , above the level that the Federal Reserve considers appropriate for a healthy economy. Inflation has risen unexpectedly high in the first two months of this year, raising concerns that disinflation may be fading.
“The worst thing that can happen to the Fed, the worst thing that can happen to the economy is these kinds of supply-side shocks, because they reduce the productive capacity of the U.S. economy and at the same time push up inflation.”City Group’s Andrew Hollenhorst spoke on bloomberg tv surveillance Tuesday’s program.
In addition to supply constraints, clearing the port and rebuilding the bridge will require resources that could be available elsewhere. This could further increase price pressure.
If the U.S. government were to step in to help fund repairs, which it most likely will be, the deficit would increase even further at a time when federal borrowing is already at a historically high level. Further government spending could worsen inflation.
“We’re probably coming out of the period of commodity deflation that we’ve had for the past six months or so,” Hollenhorst said.
