Baltimore bridge collapse could disrupt supply chain for weeks

March 28 (UPI) -- The collapse of the Francis Scott Key Bridge spanning the entrance to the Port of Baltimore has cut off the nation's ninth-largest port from all shipping activity and temporarily closed the port.

The U.S. Army Corps of Engineers is mobilizing a team of about 1,100 personnel to remove bridge debris with the help of three U.S. Navy vessels that are designed to recover heavy sunken objects.

The cargo ship Dali lost power and rammed a critical bridge support early Tuesday, which triggered the total collapse of the bridge. The vessel remained in place as rescue operations for six missing people continued. Two bodies have been recovered, but four were still missing Thursday among the twisted bridge's submerged wreckage.

Local teams also will contribute to the recovery and salvage efforts needed to remove the bridge debris and reopen the port as quickly as possible.

"Clearing debris from the channel ASAP is vital for reopening the port and protecting jobs and livelihoods in Baltimore & MD,"U.S. Sen. Chris Van Hollen, D-Md., posted on X. "I'm thankful [President Joe Biden] immediately instructed the U.S. Army Corps of Engineers to lead this effort, which is underway and to fully cover the significant cost."

While the port is closed, the direct economic impact could amount to $9 million a day, Patrick Penfield, a professor of supply chain practice at Syracuse University, told Newsweek.

East Coast most affected

As the recovery efforts get underway, the port's closure will affect the East Coast the most, The Washington Post reported. The industries most impacted by the port's closure likely will be the auto, manufacturing and coal industries.

Higher interest rates imposed by the Federal Reserve have restricted the ability of manufacturers and large commercial entities to increase their inventories. Lower inventory levels put more reliance on the global and national supply chains, which in turn depend on port facilities like those in Baltimore.

The port is the nation's busiest for importing automobiles and light trucks, which accounts for about 10% of the port's total monthly cargo traffic. Containers account for about 75% of its total shipments, and other cargo accounts for the remaining 15% of goods that flow through the port facility.

Subaru of New England is one of the many commercial entities that will feel a direct and nearly immediate negative effect of the port's closure. The company is the East Coast's largest distributor of Subaru vehicles made in Japan and gets about half of its vehicles and parts from overseas.

"If this goes on for weeks or even months, there is going to be a major parts problem," Ernie Boch Jr., founder of Subaru of New England, told NBC 10 in Boston. "I've never seen anything like it, and the backup and the problems ... are just beginning."

The port handled about $80 billion in goods last year, the most in two decades. The facility provides jobs for 15,300 people, plus about 140,000 related jobs in the area. Those job generate a total of $3.3 billion in annual earned income.

While those jobs are disrupted, Maryland lawmakers are working to enact legislation that would replace the lost income while the port facilities are closed. Meanwhile, nearby ports will see increased shipping.

Norfolk, New York ports

Items are being trucked out of Baltimore and cargo vessels are being rerouted to nearby ports.

All U.S. export containers from Baltimore will remain in place until the port reopens or the shipper provides other instructions. Those already in transit will be rerouted to alternate ports with the shipper paying any additional rerouting costs.

Alternate ports are available, including Norfolk, Va., and New York, where export containers can be loaded onto cargo ships, said CMA CGM, a French shipping and logistics firm.

Import containers also will be sent to alternate ports, where they will be available for shipping clients to pick them up.

The challenge will be adding workers and handling the temporary increases in shipping at those alternate ports, Boston University Professor Canan Gunes Corlu told NBC 10.

CMA CGM and COSCO Shipping have declared a force majeure, a clause gives global shippers the contractual right to reroute shipments underway due to circumstances beyond their control.

Global issues

The port's closure exacerbates supply chain problems already under strain due to global issues.

Houthi attacks on commercial vessels in the Gulf of Aden and the Red Sea are forcing many shippers to reroute their shipments along longer routes, which slows down delivery of goods.

Those longer routes often include trips through the Panama Canal, which is experiencing its own problems.

The canal depends on water from the Gatun Lake reservoir to maintain suitable water levels in the canal for global shipping to pass through it. The area is enduring a prolonged drought, which has made it difficult for many vessels to use the shortcut between the Pacific and Atlantic oceans.

The closure of the Suez Canal when a cargo ship became stuck amid the global COVID-19 pandemic in 2021 forced preparation for similar global supply chain disruptions.

The temporary closure of the canal cost an estimated $400 million in economic activity every hour. It forced the nation's and world's supply chain experts to build more resiliency in the global supply chain, with more shipping containers, alternate routes and alternate port destinations.