A major bridge in Baltimore collapsed on March 26th 2024, resulting in changes in the economic state and leading to the suspension of vessel traffic at the Port of Baltimore, which is one of the main and the busiest harbors in the United States.
What happened to the Baltimore Bridge?
The Francis Scott Key Bridge in Baltimore, Maryland is a steel bridge which was built and opened in 1977, spanning the lower Patapsco River and the outer Baltimore harbor. A container ship hit one of its support pillars at around 1:27 am, which caused the bridge to collapse. There were cars and six workers on the bridge when the ship hit and six workers. The workers into the river and are now presumed dead. Luckily, it has been reported that none of the people on the ship were injured.
Details about the ship
The ship, named The Dali, was Singapore-registered and was heading to Sri Lanka with 22 crew members as well as two pilots. The ship was almost as long as the Eiffel Tower, being 985 feet long (300.2 meters) and weighed 95000 tons when it was empty. The Dali was able to carry almost 10.000 metal shipping containers. At the time of the accident, it was carrying around 4.700.
The importance of the Baltimore Port for trade
In terms of trade volume, the Port of Baltimore is one of the largest ports in the United States. It mostly handles cargo including automobiles, agricultural equipment and machinery. Other than this, nearly 20 percent of the United States coal exports pass through the Baltimore Port.
In 2023, the port handled about 50 million tonnes and 80 billion dollars worth of cargo moving between the United States and many other countries. Moreover, the port processed more than 845.000 automobiles according to figures from Maryland.
What are the economic impacts of the incident?
The United States Representative for Maryland, David Trone, stated that state and federal officials estimated that the port’s closure would cost the economy around 15 million dollars a day during a briefing at the bridge collapse scene.
Furthermore, according to the Maryland Governor Wes Moore’s office, the port supports more than 15.000 jobs with an addition of 140.000 jobs dependent on the overall port activity.
The United States Senator Chris Van Hollen also said that rebuilding the bridge will take long and be expensive. The Senior White House Adviser Tom Perez said that it is too early to say how long the rebuild will take.
Other than this, President Joe Biden stated that he wants the federal government to bear the full cost of rebuilding the bridge and added that they will not wait for the company that owns the ship Dali to shoulder the costs. The funding could come from the Federal Highway Administration as well as the Bipartisan Infrastructure Law, but it may require additional funding from Congress as well.
How will the businesses using the port be affected?
Companies that use the port have stated that the suspension will not impact short-term operations negatively. For example, the United States’s largest sugar company, ASR group, reported that it has around eight weeks of sugar stocks at its Baltimore refinery, supplied by vessels coming to the port.
Several more companies such as Berkshire Hathaway Energy, BMW, Volkswagen and Mercedes have also stated that they do not expect their situation to be affected immediately and they only expect little to no effect besides delays.
However, Ford’s chief financial officer said that they will have to divert parts to other ports in order to lengthen their supply chain.
The effect on consumers
Supply chain experts say the United States port infrastructure is stronger than it was in 2021 when businesses were understaffed and struggling with backlogs as a result of the COVID-19 pandemic. This caused consumer prices to spike, but experts are not expecting this to happen on a wide scale now. However, it has been stated that the collapse of the bridge is vulnerable to any supply-chain shocks.
To sum up, the Baltimore Bridge' collapse resulted in some impacts on the markets and supply-chain but the effects are not very big and are hoped to be covered in the following weeks. The rebuild of the bridge is expected to take a long time and money so more details will be uncoevered in the next few days.