The collapse of a bridge near to the Port of Baltimore could have major implications along the supply chain, say trade experts, as commercial vessels remain trapped by the fallen debris.
Yesterday (26 March), the vessel Dali struck the Francis Scott Key Bridge near to the US port, causing the bridge to collapse and blocking access to the port.
The immediate cause of the crash is not known. Six people are reported as missing, presumed dead, although the crew of the vessel were unharmed.
‘Key port’
Maritime cargo into the port has been suspended as a result.
Marco Forgione, director general of the Institute of Export & International Trade, said the blockage to the port could not be underestimated:
"Baltimore is one of the key ports on the east coast of the US, ranked first in the country for handling light trucks, construction machinery, automobiles and imported gypsum.
“The port handles 37,850,000 tonnes of cargo, 632,000 twenty-foot equivalent units (TEU) and 252,000 passengers annually.
“Additionally, it's ranked second for exporting coal and sixth for importing coffee, and is therefore a major hub for international trade into and out of the US.”
‘Major disaster’
“This is a major disaster and will create significant problems on the US east coast for US importers and exporters,” said shipping expert Lars Jensen, adding that multiple container ships remained trapped within the port.
The delays are expected to last days and have a knock on effect along ports both inside and outside the US.
“There will be dozens of diversions in the next week and hundreds in the coming months as long as Baltimore is shut down,” Richard Meade, editor-in-chief of Lloyd’s List, told CNBC.
LNG
One at-risk good is liquefied natural gas (LNG), of which the US is the single biggest exporter in the world.
UK LNG imports hit a record high of 25.6bn cubic meters (bcm) in 2022, up 74% on 2021’s numbers.
Forgione, in comments to the BBC, highlighted the heightened risk for the commodity.
"Baltimore is a significant exporter of LNG and that has implications for the UK and the EU.”
"Around half a million tonnes of LNG leave Baltimore per month, so the implications of what's happened are significant and will cascade before we're able to get Baltimore back up and running again."
Auto impact
In 2023 the port handled 847,158 cars and light trucks, according to data from the State of Maryland, and was one of the major handling ports on the US east coast.
Ford Motor’s chief financial officer John Lawler told Bloomberg TV that the company would “work on the workarounds. We’ll have to divert parts to other ports along the east coast or elsewhere in the country.”
"We expect the situation to have minimal impact to our operations. We are working to re-route any vehicle shipments to other ports," said General Motors in a statement.
‘Heaven and earth’ rebuild
The search and rescue operation has been suspended and a “recovery operation” is ongoing, according to US authorities.
Baltimore mayor Brandon M Scott has declared a local state of emergency as the city deals with the ongoing crisis, while US president Joe Biden promised to move “heaven and earth” to rebuild the bridge.
US transport secretary Pete Buttigieg said that he would be working to establish a freight office to mitigate any supply chain issues.
Insurance issues
The vessel was purportedly owned by Grace Ocean, operated by Synergy Group and charted by Maersk.
Maersk, who said none of its personnel were on board, said it would be skipping any Baltimore sailings for the foreseeable future.
MSC also said it would be omitting the port from its sailings until it was declared safe, which the shipper said was expected to take months.
The collision has the potential to be one of the biggest maritime insurance claims for years, according to analysis from Lloyd’s List. Investigation and litigation could last years, as was the case with the Ever Given blocking the Suez Canal in 2021 and the sinking of the Costa Concordia in 2012.