UNITED STATES NEWS

Baltimore bridge collapse and port closure send companies scrambling to reroute cargo

Mar 26, 2024, 10:38 AM

The stunning collapse of Baltimore’s Francis Scott Key Bridge is diverting shipping and trucking around one of the busiest ports on America’s East Coast, creating delays and raising costs in the latest disruption to global supply chains.

After the container ship Dali hit the bridge and brought it down early Tuesday, ship traffic entering and leaving the Port of Baltimore was suspended indefinitely. That will require rerouting vessels or their cargo to other ports, potentially causing congestion and delays for importers, said Judah Levine, head of research for the global freight booking platform Freightos.

The Dali was the only container vessel in the port at the time of the collision, but seven others had been scheduled to arrive in Baltimore through Saturday, Levine said. Six people, part of a crew that had been filling potholes on the bridge, remained missing hours after the span came down.

“Aside from the obvious tragedy, this incident will have significant and long-lasting impacts on the region,” American Trucking Associations spokesperson Jessica Gail said, calling Key Bridge and Baltimore’s port “critical components” of the nation’s infrastructure.

Gail noted that 1.3 million trucks cross the bridge every year — 3,600 a day. Trucks that carry hazardous materials will now have to make 30 miles of detours around Baltimore because they are prohibited from using the city’s tunnels, she said, adding to delays and increasing fuel costs.

“Timewise, it’s going to hurt us a lot,” said Russell Brehm, the terminal manager in Baltimore for Lee Transport, which trucks hazardous materials such as petroleum products and chemicals. The loss of the bridge will double to two hours the time it takes Lee to get loads from its terminal in Baltimore’s Curtis Bay to the BJ’s gasoline station in the waterfront neighborhood of Canton, he estimated.

The accident comes as global shipping has largely adjusted to disruptions from Houthi rebel attacks on vessels in the Red Sea. The attacks, which started amid the Israel-Hamas war, have forced ships to take the longer route around the Cape of Good Hope at the southern tip of Africa and required more ships to sail more often.

The diversions have pushed freight rates from Asia to the U.S. to roughly double what they were before the war, though they prices recently declined some to $5,284 per 40-foot container, Levine at Freightos said.

Baltimore’s port has become increasingly important to U.S. retailers and manufacturers seeking to diversify their supply networks and bring goods closer to customers, said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.

“Everybody is trying to figure out the impact of the supply chain” from the loss of the bridge, said Gold who spoke with big and small retailers Tuesday. “What they had going into the port or what is currently at the port destined for somewhere else.”

Gold added that it’s too early to tell how long shipments might be delayed.

Still, Levine thinks the bridge collapse is unlikely to have a big impact on global trade, certainly nothing like the disruptions caused by the COVID-19 pandemic. First, Baltimore is not a major port for container vessels. And second, shipping traffic from Asia is in the annual lull following China’s Lunar New Year holiday.

While shipments are pushed forward to get things out ahead of the holiday in early February, the period afterwards “is the slow season for ocean freight,” he said.

The century-old Domino sugar refinery, located at the port and a Baltimore institution, expects “no short-term impact” to its operations in the city. Marianne Martinez, a spokeswoman for Domino parent ASR Group, said the refinery has six to eight weeks of raw sugar supplies on hand.

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McHugh reported from Frankfurt, Germany; D’Innocenzio from New York; and Wiseman from Washington

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Baltimore bridge collapse and port closure send companies scrambling to reroute cargo