On Tuesday, the Francis Scott Key Bridge in Baltimore collapsed after being hit by the container ship Dali. Although the ship’s crew was unharmed, there are caualties among the people that were on the bridge at the time of the accident. In addition, Xeneta and Container xChange warn that the accident may cause supply chain disruption.
The Singapore-flagged container ship Dali can carry just under 10,000 TEU and was operating on a 2M alliance service between Baltimore and the Far East. It had just left the port when it struck the bridge. There were reports that the ship had lost propulsion, but this has not yet been confirmed officially.
On Tuesday evening, search and rescue activities for survivors were suspended, with people missing presumed dead. Yesterday, authorities reported that the bodies of two road workers who were working on the bridge at the time of the accident have been recovered. Another four remain missing. Sonar equipment has been used to determine that other vehicles with victims are buried underwater under debris from the bridge. The search for bodies will continue today as soon as it is light.
Port operations have been suspended for the time being.
Potential for supply chain disruption
Of course, the focus is now on finding the people that are missing, but ocean freight shipping rate benchmarking and intelligence platform Xeneta is also looking further ahead to analyse what the consequences may be for the supply chain.
‘This is a tragic and extremely serious mass casualty event and our thoughts are with all those people involved,’ says Emily Stausbøll, market Analyst at Xeneta. ‘The immediate focus is the rescue operation, but there will clearly be a highly-complex recovery phase and investigation to follow and we don’t know what impact this will have on operations at the Port of Baltimore.’
She adds: ‘While Baltimore is not one of the largest US East Coast ports, it still imports and exports more than one million containers each year so there is the potential for this to cause significant disruption to supply chains. Far East to US East Coast ocean freight services have already been impacted by drought in the Panama Canal and recent conflict in the Red Sea, which saw rates increase by 150 per cent, so this latest incident will add to those concerns.’
‘It is likely other larger US East Coast ports such as neighbouring New York/New Jersey and Virginia can handle additional container imports if Baltimore is inaccessible, which may limit any impact on ocean freight shipping rates. However, there is only so much port capacity available and this will leave supply chains vulnerable to any further pressure. The question is how quickly ocean freight carriers can put diversions in place, particularly for vessels already en route to Baltimore or containers at the port waiting to be exported.’
Also read: VIDEO: Bridge collapses after being hit by container ship
‘Significant impact on local port and economy, limited effect on US economy overall’
Online global container logistics platform Container Xchange, based in Hamburg, Germany, also issued an advisory in which the organisation analyses the repercussions of the accident. The organisation expects there to be ‘a significant impact on the local port and shipping operations, while its effect on the overall US economy remains relatively limited.’
‘Collapse of the Francis Scott Key Bridge in Baltimore is a stark reminder of the fragility of our infrastructure and the critical need for resilience in the face of unexpected events,’ says Christian Roeloffs, cofounder and CEO of Container xChange.
He adds: ‘As we navigate the aftermath, we are reminded that the container logistics industry centers around the critical need for robust risk management and resilience in supply chain operations. It highlights the importance of contingency planning, diversified routing options, and the integration of real-time tracking and analytics to mitigate the impacts of unforeseen events. This incident serves as a reminder that infrastructure vulnerabilities can lead to disruptions, and being prepared with flexible, adaptive strategies is essential for maintaining continuity in the face of challenges.’
While the full extent of the impact is yet to be determined, the collision is likely to have far-reaching consequences for the Port of Baltimore and its role in the regional and national economy.
Areas of implications to look for in the coming weeks, according to Container Xchange are:
- Supply chain disruptions: The collapse of the Francis Scott Key Bridge could significantly disrupt the flow of goods in and out of the Port of Baltimore, particularly automobiles and crude oil. The port is a crucial gateway for specialised cargo and bulk handling, serving as a key link in many supply chains. Delays in cargo movement could lead to inventory shortages, affecting businesses that rely on timely deliveries, like the automotive industry which requires assemblies coming from different parts of the world.
- Transportation costs: Companies should prepare to face higher transportation costs as they are forced to seek alternative routes to bypass the affected area. These additional costs could result in increased prices for goods, impacting both businesses and consumers.
- Regional impact: The Port of Baltimore is a vital economic hub for the region, supporting thousands of jobs and businesses. The disruption caused by the bridge collapse could have a ripple effect on the local economy, leading to job losses, reduced business activity, and potentially lower consumer spending.
- Consumer impact: End consumers could potentially experience delays and price increases for certain products as a result of the bridge collapse, as it could take weeks, if not months, to resume operations at the port. Products that rely on timely delivery, such as perishable goods or time-sensitive materials, could be particularly affected.
Impact on container movement
The incident has led to the suspension of traffic at the Port of Baltimore, a key gateway for container shipping. With more than forty ships remaining inside the port and at least thirty others signalling their destination as Baltimore, the incident has disrupted the movement of containers. As Baltimore is one of the smallest container ports on the Northeastern seaboard, handling 265,000 containers in the fourth quarter of last year, the flow of containers may be redirected to larger ports such as the Port of New York and New Jersey. This redirection could result in increased congestion and delays at these ports, affecting the timely delivery of goods and potentially leading to inventory shortages.
Impact on port operations
The Port of Baltimore serves as a vital link for raw materials and manufactured goods, facilitating trade into and out of Maryland, the mid-Atlantic region, and the Midwest United States. It ranks at or near the top of all US ports in handling farm and construction machinery, automobiles, imported forest products, imported sugar, imported gypsum, and exported coal.
While the magnitude of the impact is yet to be determined, the disruption in traffic and operations at the port could lead to significant economic losses. The port generates nearly USD 3.3 billion in total personal income and supports over 15,000 direct jobs, with an additional 139,000 jobs connected to port work. The suspension of port activities could result in financial hardships for businesses and individuals dependent on port-related activities.
Picture (top): A view of the scene, shot during a visit of Governor Moore (photo by Maryland GovPics, Flickr).
Also read: Fog and single-point failure lead to allision with bridge support
