Bridge Collapse at Port of Baltimore Creates Supply Chain Woes

Early in the morning on Tuesday, March 26, the Francis Scott Key Bridge in Baltimore, MD was struck by a cargo ship and completely collapsed. This was after the vessel had a “complete blackout” that knocked out power to the engine and navigation equipment. Six construction workers who were on the bridge at the time of collapse are tragically presumed dead.

Maryland Governor Wes Moore said that there was no credible evidence of a terrorist attack. The ship lost power abruptly before the collision and radio traffic from emergency workers suggested that the crew was struggling to steer the ship. In fact, a crew member issued an urgent “mayday” call and first responders were able to spring into action, shutting down most traffic on the four-lane Key Bridge just before it came down.

While many seek details that led up to the accident, there are important long-term ramifications that must be considered, too. Baltimore is one of the nation’s busiest ports. In 2023, the port handled a record 52.3 million tons of international cargo, worth about $80.8 billion. The port supports more than 15,000 direct jobs and more than 139,000 indirect jobs connected to the port, generating almost $3.3 billion in total personal income.

With vessel traffic suspended until further notice, disruptions will likely be felt for weeks by companies shipping goods in and out of the country — and possibly by consumers as well. The upheaval will be especially notable for auto makers and coal producers for whom Baltimore has become one of the most vital shipping destinations in the United States.

Disruptions to US Coal Exports

Baltimore is the nation’s second largest coal export terminal, and the industry is left scrambling to figure out how to move their coal overseas. The Baltimore port has two major coal terminals, CSX and CONSOL Energy, both of which are north of the collapsed bridge and are cut off for now.

The disaster, which trapped at least two coal-carrying ships and is delaying the arrival of more than a dozen more, comes at an inopportune time for the coal industry. With the use of coal to generate power significantly declining in the United States, exports to coal-hungry nations in Asia, Europe and South America were becoming an increasingly important part of the sector. U.S. coal exports rose 13.3 percent in the first three quarters of 2023 — the most recent period with federal data available — compared to the same period in 2022. That swing was even bigger for Baltimore, the nation’s second largest coal exporter, which saw its throughput jump 41.8 percent over that period. 

Looking ahead, some of the coal slated for the Baltimore port could be redirected to Norfolk, Virginia, the nation’s top coal exporter. It could also be directed to other nearby ports including Philadelphia, Buffalo, or Savannah, but those ports handle only a small fraction of the coal exports that Baltimore does.

Disruptions to the Auto Industry

Baltimore handles more vehicle imports and exports than any other U.S. port. Last year, nearly 850,000 cars and light trucks passed through. General Motors says it is working to reroute shipments to other ports. Mercedes says it's evaluating "several options" to adapt its supply routes. Stellantis, calling the Port of Baltimore "an important waterway for the automotive industry," similarly said it's working on contingency plans to ensure an "uninterrupted flow of vehicles."

Some automakers got lucky. Volkswagen and BMW both use a terminal by the entrance to Baltimore's harbor, in a part of the port that is not blocked off, and expect no impact beyond short-term traffic snarls for trucks today.

However, for auto manufacturers that need it, rerouting isn’t easy. Cars are often transported on a special "roll-on, roll-off" or "ro-ro" vessels, which take skill to unload. And it's not just about getting a car off a ship. Facilities at ports do things like install accessories and inspect vehicles.

General Road Transportation Ramifications

Stretching 1.6 miles, the bridge saw about 11.3 million vehicle crossings per year. The collapse severs the southern stretch of Interstate 695, the portion of the Baltimore Beltway that runs through the heavily industrial areas around the port.

That Tuesday evening’s rush hour was one of the first tests for Baltimore as commuters had to find alternative routes. Traffic was bumper-to-bumper inside the Baltimore Harbor Tunnel — the closest alternative to the bridge — but it did not slow to a crawl. 

The bridge collapse just ahead of Easter could mean worse traffic than normal for both families and trucks traveling over the holiday weekend. A number of major companies — including Amazon and FedEx — also have distribution warehouses and other facilities at an industrial park at the north end of the bridge that may cause even more supply chain disruptions.

What’s Next?

President Biden said on Tuesday "It is my intention that the federal government will pay for the entire cost of reconstructing that bridge, and I expect the Congress to support my effort," adding that he plans to visit Baltimore as soon as he can. Funding could come from the Federal Highway Administration as well as the Bipartisan Infrastructure Law, but it may require additional funding from Congress. He made clear that we would not wait for the company who owns the container ship to shoulder the costs.

Additionally, Secretary of Transportation Pete Buttigieg said in a social media post Tuesday morning that he spoke with Governor Moore and Baltimore Mayor Brandon Scott, offering the Transportation Department's support after the bridge collapse. The Department of Transportation is expected to release emergency response funds. Buttigieg also said he is concerned about the local economic impact of the bridge’s collapse, as some 8,000 jobs are directly associated with port activities in the Baltimore area.

However, not all lawmakers share the same sentiment that the United States should fund the re-build. Federal officials told Maryland lawmakers that replacing the Francis Scott Key Bridge in Baltimore would cost at least $2 billion, and Congressman Andy Harris (R-MD-01) wants foreign companies to pay their share. He pointed to the ship owner, the shipping company that contracted it, and their insurance backers as sources to fund the recovery effort. The 948-foot container ship that crashed into the bridge Tuesday is owned by Singapore-based Grace Ocean and was chartered by the shipping giant Maersk.

No matter how much federal support is vowed, the bridge reconstruction is turning into a highly divisive issue. We can be sure that federal transportation and infrastructure policy will be back in the limelight.