Baltimore's Key Bridge collapse wreaks havoc on supply chain as port traffic screeches to a halt at a cost of $15M per day

Baltimore's collapsed bridge will cause more chaos for an overstressed supply chain and could hike prices for months to come.

The shipping industry was already struggling with rebel attacks in the Red Sea and drought in Panama before the Francis Scott Key Bridge fell on Tuesday.

The Port of Baltimore is shut down indefinitely until wreckage of the 1.6-mile bridge is cleared from the Patapsco River, which could take two months.

Photos showed at least a dozen large ships sitting in the Chesapeake Bay waiting for instructions about which port they would be rerouted to.

The port creates $2.6 billion in business income, $3.3 billion in wages, and nearly $400 million in taxes a year, according to the Maryland Government.

Experts estimated more than $15 million in local economic activity would be lost for every day the port stays shut.

The Port of Baltimore is shut down indefinitely until wreckage of the 1.6-mile bridge is cleared from the Patapsco River, which could take two months

Over the next few weeks, 107 vessels scheduled to dock in Baltimore will have to find another port - and far more the longer the harbor is closed.

Baltimore handled 52.3 million tons of foreign cargo last year worth about $80.8 billion, ranking ninth in the US for both metrics and records for the port.

The cost to shipping, consumers, and the American economy is too early to calculate, but every day the port is closed is $217 million worth of cargo not arriving.

The port generates more than 15,000 jobs, including 2,000 dock workers down $2 million a day in lost wages, and another 140,000 are dependent on port activity.

Though Baltimore is not a huge container port, with only 1.1 million 20ft equivalent unit containers arriving last year, it has a critical specialized role.

The port handled 847,158 cars and light trucks, the most in the US for the 13th year in a row, and 1.3 million tons of farm and construction machinery.

Few other ports have anywhere near as much capacity for roll on/roll off cargo and the car industry and farmers could feel the pinch.

'The port here in Baltimore does the most vehicle handling of any port at all, and that's just talking about the vehicle side. You also have container traffic. You have the bulk traffic,' Transportation Secretary Pete Buttigieg said.

'There is no question that this will be a major and protracted impact to supply chains. It's too soon to offer estimates on what it will take to clear the channel and reopen the port.'

Buttigieg said the vast majority of the port is inside of that bridge, which means most of it couldn't operate, but it would be open much faster than a new bridge.

'Reopening the port is a different matter from rebuilding the bridge. The port, that’s just a matter of clearing the channel,' he said. 

Photos showed at least a dozen large ships sitting in the Chesapeake Bay waiting for instructions about which port they would be rerouted to

This aerial image shows container ships anchored in the Chesapeake Bay off Annapolis

Each green dot is a large container ship or tanker stuck in the Chesapeake Bay, unable to enter the Port of Baltimore 

'Vicious feedback loop' for US supply chains

Though even a prolonged closure of the port was unlikely to have a noticeable impact on the entire economy, experts warned it could spark a 'vicious feedback loop'.

Shipping prices surged since October after the Red Sea became a dangerous and lawless crossing due to attacks from Houthi rebels in Yemen.

This prompted many operators to sail around the southern tip of Africa instead, a much longer and more expensive journey, and to sail more often.

At the same time, the Panama Canal was hit by drought that shrunk its water levels and consequently slashed its capacity to two thirds of normal.

Faced with both these disruptions - the worst since the Suez Canal was blocked during the pandemic in 2021 - prices jumped 150 per cent, though they have eased back to 2019 levels of about $5,284 per 40ft container.

Ports along the US East Coast learned from dramatic congestion during the pandemic and increased their capacity - but could still struggle.

'There is only so much port capacity available and this will leave supply chains vulnerable to any further pressure,' Emily Stausbøll, market analyst at Xeneta, an ocean freight shipping rate benchmarking and intelligence platform, warned.

Baltimore handled 52.3 million tons of foreign cargo last year worth about $80.8 billion, ranking ninth in the US for both metrics and records for the port. Now it is silent

Ryan Petersen, chief executive of supply chain management company Flexport, said even Baltimore's smaller amount of containers would case problems.

'Redirecting all this cargo to other ports is likely to lead to congestion and delays across the eastern seaboard as they will struggle to handle the sudden surge in volumes,' he said.

'As we saw in Covid, even a 10 or 20 per cent increase in volumes can lead to a compound feedback loop of congestion and delays.'

Petersen said this could accelerate a trend of shipping lines switching to west coast ports that was already underway due to the problems at the Red Sea and Panama Canal.

The industry was also concerned about the prospect of striking dock workers as the ILA union that operates east cost ports is renegotiating its contract, which ends on September 31.

Companies then truck or rail cargo across the country to avoid the delays.

'Most ocean freight contracts are signed between March and May each year, so many companies have the flexibility right now to sign contracts to ship their containers to the west coast to avoid likely congestion and delays on the east coast,' Petersen said.

'This will surely cause even more cargo to shift to the west coast, likely leading to congestion and delays... you get this vicious feedback loop.'

This aerial image shows container ships anchored in the Chesapeake Bay off Annapolis, Maryland

 The ships are in a holding pattern east of Annapolis, waiting for days until they can be re-routed elsewhere

Even more ships didn't make it that far and are waiting just inside the Chesapeake Bay. Some may end up at Norfolk nearby

The 50m-wide ship is marooned under the bridge. It arrived in Baltimore from Norfolk on Monday having previously made journeys to New York City and Panama

Delays and possible price hikes on cars

Even if other ports like New York-New Jersey, Norfolk, Philadelphia, Boston, Charlestown, and Savannah can pick up the slack, Baltimore's specialized role is harder to make up for.

It is the busiest American port for vehicle shipments, handling 847,158 cars and light trucks, the most in the US for the 13th year in a row.

More than 750,000 of these vehicles were imports in 2023, according to data from the Maryland Port Administration.

About $23 billion of the port's $55.2 billion worth of imports last year - and 42 per cent of its import volume - were vehicles, along with about $4.8 billion of its exports.

The port handles imports and exports for major automakers including Nissan, Toyota, General Motors, Volvo, Jaguar Land Rover, and Volkswagen, including luxury models for Audi, Lamborghini, and Bentley.

The second-biggest port for vehicles is Brunswick, Georgia, 700 miles south and more isolated from major population centers.

It is the busiest American port for vehicle shipments, handling 847,158 cars and light trucks, the most in the US for the 13th year in a row. These Suzuki 4WDs were imported from Japan

Vehicles at an automobile terminal, which processes cars and light trucks from 'roll-on/roll-off' cargo ships in Baltimore

A car carrier trailer drives through the Port of Baltimore in Baltimore, following the collapse of the Francis Scott Key Bridge

Tinglong Dai, professor of operations management and business analytics at the Johns Hopkins University, said the effects could take a year to dissipate.

'Baltimore is like Taylor Swift in the universe of US auto ports, and when she's not performing as usual, even for a few weeks, the world feels a great loss,' he said.

'It's very difficult to estimate the [shipping] cost impact, but it's fair to say it's going to be costlier to transport autos and trucks to and from the US in the short term because of the oversize impact on the port of Baltimore.'

Dai said there could be delays and added costs for car buyers in the short term, but they wouldn't be catastrophic.

'On the consumer side, we're likely to see delays in delivery in some cases, depending on how quickly vehicle inventories are depleted, and perhaps price increases in certain cases,' he said.

'However, given the resilience we've built into our supply chains since the early 2020s, any disruptions should be less significant. 

'The supply chain has shown a robustness in 2024 that was not as pronounced in previous years.'

Marine Traffic website shows all the ships trapped in the harbor downstream from the bridge. Most of them are small boats, including those in the rescue

A closer view of the harbor shows several large ships including cargo vessels moored inside with nowhere to go

Closer to the bridge (bottom right) shows more large ships stuck inside

Car manufacturers are scrambling to find alternate routes to import and export vehicles with the biggest port for their operations closed. 

GM exports vehicles to South America and America through Baltimore, but said it would have 'minimal impact'.

'We are working to re-route any vehicle shipments to other ports,' it said.

Ford chief financial officer John Lawler told Bloomberg that the company was rerouting auto parts to other East Coast ports, which would 'lengthen the supply chain a bit'.

'It's a large port with a lot of flow through it, so it's going to have an impact,' he said. 

'We'll work on the workarounds. We'll have to divert parts to other ports along the East Coast or elsewhere in the country.' 

Volkswagen's shipping facility is on the eastern side of the bridge and therefore unaffected, but still has to deal with traffic gridlock across the city.

'Last year, we received, processed and shipped approximately 100,000 vehicles through Baltimore for US dealers located in the Northeast and Mid-Atlantic US,' the German car maker said.

'We do not anticipate any impact on vessel operations but there may be trucking delays as traffic will be rerouted in the area.'

The risk of car price spikes is further dampened by a recovery in automotive inventories to their highest level since May 2020, after being drawn down sharply during the pandemic. 

The industry's inventory-to-sales ratio is near its 32-year-average of 1.96 to 1 according to Census Bureau data, and sales incentives have risen in recent months as high interest rates dampen demand.

Stunning images show the mangled wreckage of the bridge hours after it was struck by the cargo ship 

Bad timing for American farmers

Baltimore is also the largest American port by volume for handling farm and construction machinery like combines, tractors, hay balers, excavators and backhoes, with 1.3 million tons last year.

A shortage of that supply would come at a terrible time for farmers in the Midwest as they gear up for planting season.

'I think it has a huge economic impact on the farming industry,' DAT Freight and Analytics principal analyst Dean Croke told NBC.

'This is peak planting season in the Midwest and peak machinery import season. March is the biggest month for machinery shipments into the US via Baltimore.'

Imports of agricultural products, of which Baltimore is also one of the biggest destinations, totaled 3 million tons last year, including 1.2 million of sugar and salt, as well as gypsum, fertilizers, and forest products.

ASR Group said its plant in Baltimore had six to eight weeks of raw sugar stockpiled after two ships arrived just before the bridge went down, and if it was down any longer it could use stockpiles elsewhere in the US.

Baltimore was also ranked sixth in coffee imports in 2022, bringing in about 120,000 tons worth a little under $610 million.

Baltimore is also the largest American port by volume for handling farm and construction machinery like combines, tractors, hay balers, excavators and backhoes, with 1.3 million tons last year

Imports of agricultural products, of which Baltimore is also one of the biggest destinations, totaled 3 million tons last year, including 1.2 million of sugar and salt, as well as gypsum, fertilizers, and forest products

Coal exports blocked 

Baltimore was also the second busiest for coal exports last year, with Its eight dry bulk terminals exporting 20.3 million tons of coal last year and small amounts of other metals and minerals.

About 20 per cent of US coal exports pass through Baltimore en-route to India, the Netherlands, Japan, and elsewhere.

India, in particular, is a big customer as it gets about six per cent of its coal from the US - 14 million tons last year.

About 2.5 million tons of coal will be blocked over the next six weeks.

'Baltimore is a major port for the export of coal, and it's not like you can move the coal to another facility because you need specialized facilities for that,' Salvatore Mercogliano, an associate professor at Campbell University, said on his What Is Going on With Shipping? YouTube channel.

'Those that do exist are largely at capacity. Shutting down the port of Baltimore is going to have a major impact on the transportation of energy out of the US.'

Ami Daniel, founder of shipping risk analysis company Windward, said local supplies of steam could also be in jeopardy.

'If you're in the construction business and you haven't piled up enough steel because of [high[ interest rates, then there's a good chance you're going to run out of steel,' he said.

'If you're in the shipbuilding or construction business, it can slow down your project.'

A shortage of steel and other construction materials that Baltimore imports in huge quantities would be especially problematic, as construction picks up as the weather warms.

Other top export commodities by weight in 2022 were liquefied natural gas, wastepaper, ferrous scrap, and automobiles/light trucks.

Cove Point, which is upstream from the bridge, is the nearest LNG terminal. ICIS ship tracking data show Cove Point typically exports about 551,000 tons per month.

Cruises carrying more than 444,000 passengers departed from the port, which is a major destination for Norwegian, Carnival, and Royal Caribbean cruises.

Trucking chaos

Hundreds of ships unloading at different parts around the country also presents logistical problems once they are unloaded. 

The American Trucking Association estimated about 4,900 trucks per days carrying an annual average of $28 billion worth of goods would have to be re-routed from other ports to where they would have gone from Baltimore.

It said the cost, both directly and in time, would inevitably be passed on to consumers.

The biggest problem would be moving hazardous materials, like diesel fuel, because they are not allowed to go through tunnels. 

The ATA said the disaster would 'add significant cost in time, fuel and delays for trucks traveling through the region, on top of the disruption that a closure of the Port of Baltimore will inflict on our economy'.

The use of trucks as an alternative to shipping goods will also cause traffic backups on American highways, Petersen predicted.

'The East Coast I-95 corridor is going to be a real disaster,' he said. 

Thousands out of a job 

Then there is the cost to the economy of the workers whose livelihoods depend on the port being operational.

The port directly generates, over 15,000 jobs, with an additional 140,000 jobs dependent on port activity, according to Maryland Governor Wes Moore's office.  

The dockworkers are day laborers, said Scott Cowan, head of the International Longshoreman's Association Local 333 in Baltimore, meaning they only work when there is cargo to be moved. 

He estimated there might be about a week's work clearing the existing inventory at the port.

'After that,' he said, 'we're dead in the water' with a collective $2 million a day in lost wages at stake.

At the first press conference around 6:30 am, Baltimore Fire Chief James Wallace could only confirm that two people were pulled from the water

Baltimore residents are already worried about the effects of the port closure will mean for them, as the local economy will be hit the hardest.

'This is going to be catastrophic for many reasons,' one Baltimore resident told WZJ. 

'Number one, the harbor's blocked. Number two, we're not going to get any more new car deliveries at this time. 

'Amazon is just on the other side of the river and you can forget your same-day, next-day delivery packages. 

'The beltway is going to be a parking lot. The tunnels are going to be over-jammed.'

Baltimore It is the deepest harbor in Maryland's Chesapeake Bay, closer to the Midwest than other East Coast ports, with five public and 12 private terminals.

It is one of the smallest container ports on the Northeastern seaboard, handling 265,000 containers in the fourth quarter of last year, according to container shipping expert Lars Jensen.

The Port of New York and New Jersey handled around 2 million containers in that same period, and Norfolk Port in Virginia handled 850,000, so the flow of containers to Baltimore can likely be redistributed to bigger ports, Jensen said.

An injured person was pictured being loaded into an ambulance after getting taken off the ship following the collapse

Danish shipping giant Maersk, which chartered the Dali and had its customers' cargo on board, said it would stop using the Port of Baltimore.

'Due to the damage to the bridge and resulting debris, it will not be possible to reach the Helen Delich Bentley port of Baltimore for the time being,' it said.

'In line with this, we are omitting Baltimore on all our services for the foreseeable future, until it is deemed safe for passage through this area.'

The Dali is owned by Grace Ocean and operated by Synergy Group, and Maersk said none of its crew were on board the ship.

Ships headed to Baltimore will divert to nearby ports, from which it will be possible for cargo to use other means of transportation to reach their final destinations, the company added.

For cargo set to be released in Baltimore, the company said to expect delays, as they look for other port alternatives.

It remains unclear what led to the crash. Video shows the ship going dark seconds before the collision, suggesting a power failure on board. 

The crew of 22, none of whom were injured, remains onboard and is being questioned by the Coast Guard.

An aerial view of the collapsed Francis Scott Key Bridge after the collision

The Dali was bound for Colombo, Sri Lanka. It's unclear what cargo it was holding. The vessel was due to land in Asia on April 27. 

The 50m-wide ship is marooned under the bridge. It arrived in Baltimore from Norfolk on Monday having previously made journeys to New York City and Panama. 

The ship was piloted by a specialized local crew trained to avoid obstacles at ports, who then depart the ship when it reaches open water.

This is not the first time the Dali has crashed. In 2016, the ship smashed into the dock in Antwerp, Belgium, as it was leaving the port for German city Bremerhaven during good weather.

The Dali suffered 'sufficient damages' in the stern, but remained afloat, while the dock was 'seriously damaged' at the time. No people were injured at the time and no oil spill was reported. 

It was not immediately clear what caused the cargo ship to crash into the bridge

Baltimore officials are on a race to save up to 20 people who plunged into the Patapsco River after a Singaporean cargo ship crashed into the Francis Scott Key Bridge

The ship underwent 27 inspections since 2015, and it had been found to have two 'deficiencies', according to a CNN review of records from the Electronic Quality Shipping Information System.

Notably, this included a June 2023 inspection in San Antonio, Chile, where a deficiency was found in the 'propulsion and auxiliary machinery' - with propulsion faults also noted in the early CISA report.

The 1.6-mile bridge, which is part of I-695, crosses the Patapsco River in Baltimore's harbor. Built in 1977, the main span of the truss bridge at 1,200ft is the third longest span of any continuous truss in the world.

The structure carries around 12 million vehicles every year. It carries the Baltimore Beltway/Interstate 695 over the river. 

Baltimore's port became internationally famous in 2003 when it was a key setting for the second season of HBO's The Wire.