Six people are still missing, and huge, fallen parts of the bridge are still blocking passage to the port of Baltimore USA. It is unclear how long shipping traffic will remain closed to one of the ten largest container ports in the USA. In addition to the human tragedy, the consequences of the accident for the economy and companies are likely to be greater the longer seaside access to the port remains closed. However, the consequences of the accident are assessed differently.
While US Transportation Secretary Pete Buttigieg (42) spoke on Wednesday night of supply chain problems that could have massive economic consequences for the entire USA, economists and logistics experts interviewed by Reuters said that they did not expect a major supply chain crisis with rapidly rising goods prices. The Port of Baltimore, which employs 2,000 people, will feel the effects of the disaster if shipping traffic is stopped for a longer period of time. However, there are sufficient capacity reserves in competing ports on the east coast.
The collapse of the Francis Scott Key Bridge in Maryland is a reminder of the U.S.’s vulnerability to supply chain shocks. “But this event will have a greater economic impact on the Baltimore economy than nationally,” Reuters quoted Ryan Sweet, chief U.S. economist at Oxford Economics, as saying.
Although the Port of Baltimore ranks among the top 10 in the U.S. in terms of container volume, it handles far fewer containers than other East Coast ports. A majority of the cargo ships heading to Baltimore are now likely to use the ports of new York and New Jersey. According to analysts at S&P Global Market Intelligence, only 3 percent of all imports from the East Coast and Gulf Coast were handled in Baltimore by the end of January, the business news agency writes Bloomberg
.
Mercedes terminal not accessible, VW and BMW are lucky in misfortune
However, Baltimore is more important for cars and light commercial vehicles, as European car manufacturers such as Mercedes-Benz, Volkswagen or BMW operate some plants in and around the port.
Mercedes confirmed on Wednesday that its charging terminal, located behind the collapsed bridge, is currently cut off from the sea. However, Mercedes also imports vehicles via ports such as Brunswick and Charleston, the company writes in a statement to manager magazin. Together with its transport partners, Mercedes is adapting its delivery routes.
Volkswagen and BWM, on the other hand, are lucky in misfortune as, according to “Handelsblatt
“operate their car terminals in front of the collapsed bridge at the port entrance. Last year, Volkswagen imported around 100,000 vehicles into the USA via Baltimore.
Coal exports severely disrupted for the time being
On the other hand, the port is an important transshipment point for coal. The Baltimore site handles around 27 percent of all US seaborne coal exports, reports the “Wall Street Journal
“. According to ship tracking firm Kpler, traders exported about 22.9 million tons of the commodity from Baltimore last year and shipped much of the fuel to buyers in India for heat and power generation, China and Europe. Pennsylvania coal producer Consol Energy and rail operator CSX operate export terminals at the port. Share prices of both companies fell on Tuesday.
Breakwave Advisors, a commodity shipping consulting firm, stressed that coal suppliers would seek to reroute their goods through the larger coal export hub of Norfolk, Virginia. However, the short-term provision of railcars could cause problems for the railway because coal stocks are large and fuel prices are currently low. Presumably no supplier wants to bear the additional costs of marketing the coal elsewhere.
Huge sugar refinery still has enough in stock
Conversely, the accident is also likely to have an impact on the import of raw sugar. The Domino Sugar refinery near Baltimore is considered one of the largest in the United States, producing up to 6 million pounds of refined sugar daily. However, the refinery’s owner, ASR Group, reports that the plant has six to eight weeks’ worth of raw sugar in stock after two large ships recently unloaded their cargo. If the port of Baltimore is blocked for an extended period of time, the company could access stocks of refined sugar at its other US refineries and warehouses, a spokeswoman told the Wall Street Journal. Raw sugar shipped in smaller ships could also be unloaded at other ports and transported by rail to the refinery.
US President Joe Biden promises federal aid
But goods and goods do not only reach and leave the Baltimore region by sea. Around 35,000 people use the bridge every day, and numerous trucks with cargo pass the Francis Scott Key Bridge at a constant rate. They transport $28 billion worth of goods across the bridge every year, Bloomberg reports, citing data from the American Trucking Association.
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The Francis Scott Key Bridge was completed in 1977 after five years of construction. According to expert estimates, the costs of reconstruction are likely to amount to “several billion dollars” today. US President Joe Biden (81) has already promised federal aid and promised to “move heaven and earth to reopen the port and rebuild the bridge.” It could take weeks until port operations resume because the bridge rubble must first be removed from the river.