East Coast ports brace for fallout from Baltimore bridge collapse

Eastern seaboard ports are preparing to accept rerouted goods from the Port of Baltimore following the collapse of the Francis Scott Key Bridge early Tuesday morning.

Port officials and private distributors told The Hill that plans are underway to divert cargo shipments as ships are suspended in and out of the Port of Baltimore.

“We’ve had multiple meetings all day long about how to deal with this,” including Amazon, Home Depot, McCormick, BMW and Volkswagen.

The company said in a statement that it has been in constant communication with city and state officials during what it called an “extremely difficult situation.”

Virginia Ports Authority officials said they are “confident” more cargo will move through the state’s port system, which includes a major hub in Norfolk, but the extent of the necessary diversions is not yet clear. I warned you.

“Currently, communication is open with our customers, the ocean carriers that own the cargo, including big box carriers,” Joe Harris, a spokesperson for the Virginia Port Authority, told The Hill. Told. “They are going to sit down and decide on the best place to land the cargo.”

The Ports of New York and New Jersey said Tuesday they are working with shippers to ensure East Coast supply chains do not collapse under the strain of losing access to the Port of Baltimore.

Some cargo destined for Baltimore will likely be diverted to New York, the East Coast’s largest port and the nation’s second-largest port after Los Angeles. New York longshoremen handled about 20% more cargo in 2021 than they do now, according to official estimates.

Several East Coast ports told The Hill on Tuesday that they had capacity to absorb the additional shipments, suggesting the impact on overhead costs and consumer prices could be limited.

The Port of Baltimore announced Tuesday that while there are currently no ships operating within the facility, the port remains operational and trucks are moving in and out of the terminal.

“We don’t foresee a major impact on logistics or transportation moving forward. There may be some disruption over the next few days until things are resolved, but I think we’ll get through this fairly quickly,” the Baltimore County Chamber of Commerce said. Brent Howard, president of the organization, said in a telephone interview.

The Port of Baltimore specializes in what the shipping industry calls “roll-on-roll-off” cargo: vehicles and heavy equipment rather than containers. Experts say the commercial impact of the bridge collapse could most directly affect car shipments.

“Baltimore is very important in terms of consumer goods, automobiles, and other goods that the United States imports from abroad. This is less important in the commodity business. They export coal from the Baltimore area, but perhaps The most affected will be, for example, new vehicle deliveries,” John Cartsonas, a shipping analyst who runs two shipping-focused ETFs, said in a commentary.

Kartsonas said the incident would cause “disruption to global trade,” but “some of it will also impact the U.S. market” because of Baltimore’s importance in importing cars and consumer goods. Ta.

Still, representatives from the Port of Philadelphia said excess vehicle imports would not be a problem.

“Philadelphia is home to our vehicle processing center, the Roll-On, Roll-Off Terminal, where we import Hyundai, Kia and Genesis vehicles, and we have a skilled Teamster and Genesis workforce. [International Longshoremen’s Association] We are already trained to handle those cargoes,” Ryan Mulvey, communications director for the Port of Philadelphia, told The Hill.

Mulvey said the Port of Philadelphia hasn’t received any ships from Baltimore yet, but some diversions will be made in the coming days and weeks, depending on how long Baltimore’s shipping terminal remains inaccessible. He added that he expected to die.

Whether companies choose to raise prices in response to diversion costs could be a matter of how quickly they react to the closure of access to Baltimore’s ports.

“The question is how quickly ocean freight carriers can set up diversions, especially for ships already en route to Baltimore and containers waiting for export at ports,” said Emily, an analyst at cargo analysis firm Zeneta.・Mr. Stausboul told industry publication World Cargo News. .

Additional capacity at nearby ports “could have limited impact on ocean freight rates,” Stausboul noted, adding that “available port capacity is limited and supply chains are vulnerable to further pressure.” will remain vulnerable.”

Transport routes and supply chains are under scrutiny in the aftermath of the pandemic, as geopolitical tensions rise and production pipelines are overhauled as part of new economic policies.

Attacks in the Red Sea in response to Israel’s siege of Gaza have forced many ships from the Red Sea and around the Horn of Africa, leading to soaring global shipping costs.

Drought in Panama has disrupted traffic on the Panama Canal, one of the world’s major shipping routes.

The producer price index is ocean freight transportation After being relatively flat between 2010 and 2020, it soared in 2021 in the wake of the pandemic-induced economic shutdown and remains near record highs.

This metric has increased by about 45 percent over the past decade, but by more than 50 percent in the past four years alone.

inflation Because the economy is slowing down, Supply chain pressure eased and the consumer I used up my savingsbut you get the benefits of both absolute condition and as Share of added value It remains well above pre-pandemic levels.