The early-morning catastrophic collapse of the Francis Scott Key Bridge in Baltimore, Maryland, has brought one of the most important trade hubs in the United States to a halt — indefinitely.
A 948-foot container ship called the Dali hit a support column on the Baltimore bridge around 1:30 a.m. Tuesday, causing it to fall and sending at least seven cars plunging into the Patapsco River. The Dali had been headed to Sri Lanka and was flying under a Singapore flag.
The 1.6-mile bridge’s collapse will undoubtedly have a profound economic effect both locally and globally. Around the world, about 40 ships, including 34 cargo vessels, were headed for Baltimore, according to MarineTraffic, which tracks ships.
The Port of Baltimore tops the U.S. list for the volume of automobiles and light trucks it handles, as well as for vessels that carry wheeled cargo, such as construction machinery and farm equipment, Gov. Wes Moore (D-MD) boasted last month. The Maryland Department of Transportation Port Administration called “cargo” the “lifeblood of the Port of Baltimore.”
The Port of Baltimore, the deepest harbor in Maryland’s Chesapeake Bay, is closer to the Midwest than any other East Coast port. It’s one of Maryland’s major sources of personal and business revenue and has created 15,300 direct jobs and another 140,000 other jobs linked to port activities, according to Moore.
It generates more than $395 million in taxes, $2.6 billion in business income, and $3.3 billion in total personal income. Maryland resident Greg Trenchard, who often travels across the bridge to take photos at sunrise and sunset, called the collapse and closing of the port a blow to the city.
“It’s devastating to port traffic and everything they’re trying to do to revitalize the shipping industry in Maryland and keep that going,” he told USA Today.
All vessel traffic in and out of the Port of Baltimore is suspended until further notice.
Kevin Linderman, a professor and supply chain expert at Pennsylvania State University, said that while the port is closed, companies will have to reroute their shipping to other East Coast ports in New York, New Jersey, and Virginia.
“However, this will put additional demand on these ports, and shippers may not be able to access U.S. markets” as efficiently, he said. “One critical question is, can the other ports handle the products that were destined to Baltimore?”
It’s a concern echoed by Emily Stausbøll, an analyst at Oslo-based shipping analytics company Xeneta.
“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,” she told Bloomberg, adding that the bridge collapse could threaten global trade flows that have already been strained.
“Far East to U.S. 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%,” she added. “This latest incident will add to those concerns.”
Here’s a look at some of the other economic effects of the bridge collapse and port closure:
Automobiles
Jason Miller, a business professor at Michigan State University, said he believes consumers interested in imported motor vehicles will be hit the hardest.
“As such, so long as motor vehicle sales remain strong, we could see inventories drop on the lots of dealers that sell imported vehicles until alternative arrangements can be made,” he said. “This could increase motor vehicle prices for some makes and models.”
John Lawler, Ford Motor Company’s chief financial officer, told Bloomberg TV that the port closing will have an impact on sales. “We’ll work on the workarounds,” he added. “We’ll have to divert parts to other ports along the East Coast or elsewhere in the country.”
General Motors also said it is working to reroute vehicle shipments, though it said it is only bracing for “minimal impact” from the port closing.
The news was even better for Volkswagen, which said its port operations would be unaffected due to the location of its facilities.
“We do not anticipate any impact on vessel operations but there may be trucking delays as traffic will be rerouted in the area,” the carmaker said in an emailed statement.
Despite the degrees of disruption, the bridge collapse and port closing come at a time when the auto industry was just starting to bounce back from the pandemic and problems with the global supply chain.
Cargo
The Port of Baltimore was the ninth-busiest port in the nation last year for receiving foreign cargo in terms of volume and value.
The largest container ship ever to enter the port also arrived last year with the capacity to carry more than 15,000 20-foot containers. State-owned terminals, which are managed by the Maryland Port Administration, and private terminals in Baltimore transported a record 52.3 million tons of foreign cargo in 2023, worth an estimated $80.8 billion.
“This is a major disaster and will create significant problems on the U.S. East Coast for U.S. importers and exporters,” Lars Jensen, CEO of Vespucci Maritime, warned Tuesday. “The bridge collapse will mean that for the time being, it will not be possible to get to the container terminals, or a range of the other port terminals, in Baltimore. … Additionally, this means the cargo already gated into the Baltimore terminals would have to either wait an unknown period for the sea lane to reopen or be gated back out and shifted to a different port.”
Coffee, coal, and sugar are also transported in large volumes through the port.
Georgios Hatzimanolis, who analyzes global shipping for MarineTraffic, said he expects delays.
“We do expect there to be a ripple effect, but it’s a bit too early to say what the impact will be,” he said.
Deliveries
Big-name distribution warehouses such as Amazon, FedEx, Home Depot, and Under Armour are located in an industrial park near the Port of Baltimore. While they were not directly affected by the bridge collapse, they could experience some residual effects.
Neil Saunders, managing director of the retail division at consulting company GlobalData, said rerouting bridge traffic could “have a negative impact on journey times and costs for both incoming and outgoing goods” from those centers.
“There might be a slight regional impact as other centers have to increase volume to compensate, but this should not be too onerous as most retailers can divert delivery traffic via other routes,” he told Business Insider.
When it comes to volume, the Port of Baltimore accounts for only 4% of all East Coast trade volume, compared to New York, for example, which handles 38%.
Cruises
The collapse of the Francis Scott Key Bridge will also throw a wrench into several major cruise lines traveling in and out of Baltimore. There were more than a dozen ships scheduled to make 115 stops in the Port of Baltimore, according to the Cruise Lines International Association, the industry’s top trade group.
“We are deeply saddened by the tragedy and collapse of the Key Bridge that occurred last night and extend our support and heartfelt prayers to all those impacted,” CLIA spokeswoman Anne Madison said in a statement. “We join everyone in extending our thanks and appreciation to the first responders and emergency workers in Baltimore, the U.S. Coast Guard, and other professionals who are working with one goal in mind — to save lives. We are closely following this situation.”
Carnival Cruise Line and Royal Caribbean have trips on the books, including Royal Caribbean’s Vision of the Seas scheduled to depart from Baltimore on April 12. On its website, the company touts its cruises from Baltimore, calling it the “perfect mix of big-city bustle and vacation vibes.”
It also directs customers to check out Baltimore’s National Aquarium, Fort McHenry, and pit stops at “one of Baltimore’s many acclaimed restaurants, locally loved coffee and tea shops, or craft breweries.”
“Add a day or two to take your vacation to experience the best of Baltimore before or after you set said — you’ll be glad you did,” the website states.
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