How a Bridge Collapse Rippled Through Global Trade

Concerns have been raised about a “ripple effect” on global supply chain issues after a container ship crashed into a bridge in the US city of Baltimore nearly two months ago. The ship, named the Dali, hit a support column of the Francis Scott Key Bridge in the early hours of March 27, causing it to collapse. The bridge spanned the entrance to the Port of Baltimore, the busiest port in the US for car exports and the ninth-busiest for foreign cargo. Officials initially suspended maritime traffic through the port—which last year amounted to more than 47 million tonnes of foreign cargo—”until further notice.” This suspension has had a significant ripple effect on global supply chain issues, affecting industries and markets worldwide.

A Catastrophic Crash: What Happened?

The incident occurred nearly two months ago, on March 27, when the Dali, a large container ship, collided with a support column of the Francis Scott Key Bridge. The impact was severe enough to cause the bridge to collapse, cutting off a crucial access point to the Port of Baltimore. The immediate aftermath saw six people missing, presumed dead, as the search and rescue operations commenced.

Eyewitnesses and officials reported that the Dali issued a distress call shortly before the crash, citing a power issue. Despite efforts to avert disaster, the ship’s momentum carried it into the bridge’s structure, leading to the catastrophic collapse. The US Coast Guard initially suspended its search and rescue operation, shifting focus to a recovery mission for the missing individuals.

The ship’s cargo and the potential environmental impact have also been under scrutiny. With the bridge collapse obstructing the entrance to the port, the ramifications extend beyond the immediate loss of life and infrastructure damage. The investigation into the cause of the crash is ongoing, with transportation safety experts aiming to board the stricken ship and recover its data recorder. Preliminary reports from the Maritime and Port Authority of Singapore, where the Dali is flagged, indicate that the ship had valid certificates for structural integrity and equipment functionality at the time of the incident.

Baltimore Port’s Role in Global Trade

The Port of Baltimore is a linchpin in US and global trade, renowned for its role in the automotive and machinery export sectors. Last year alone, it handled over 47 million tonnes of foreign cargo, making it the busiest US port for car exports and a critical node in the global supply chain. More than 750,000 cars and vehicles passed through Baltimore, including major brands like General Motors, Ford, Jaguar Land Rover, Nissan, Fiat, and Audi.

The port is also the largest US port by volume for handling farm and construction machinery, and the second largest for coal exports. This infrastructure supports approximately 15,000 jobs directly and an estimated 140,000 more indirectly. The collapse of the Francis Scott Key Bridge has thus created a significant bottleneck, with maritime traffic suspended and cargo flows disrupted.

US Secretary of Transportation Pete Buttigieg emphasized the gravity of the situation, noting that the impact on supply chains will be major and protracted. While the port handles a relatively smaller volume of containers compared to giants like the Port of New York and New Jersey, its specialized role in vehicle and machinery exports means that disruptions here have outsized effects on those industries. Efforts to redistribute the flow of containers to larger ports are underway, but the unique cargo mix of Baltimore means not all can be easily rerouted.

Ripple Effects on Supply Chains Worldwide

The collapse of the Francis Scott Key Bridge has had far-reaching implications for global supply chains and supply chain issues. As the Port of Baltimore handles a significant volume of automotive, machinery, and coal exports, the disruption has created a domino effect on various industries. Marco Forgione, director general at The Institute of Export and International Trade, highlighted that the suspension of maritime traffic has caused delays and increased costs for manufacturers and exporters relying on the port.

The automotive industry, in particular, has felt the impact acutely. With over 750,000 vehicles passing through Baltimore annually, brands like General Motors, Ford, Jaguar Land Rover, Nissan, Fiat, and Audi have faced delays in getting their products to market. This has not only affected production schedules but also dealer inventories and consumer deliveries.

Furthermore, the port’s role in handling farm and construction machinery means that agricultural and industrial sectors are experiencing bottlenecks. These delays can disrupt planting and harvesting schedules for farmers and slow down construction projects that rely on imported machinery.

The coal export sector, which is the second largest in the US through Baltimore, has also been significantly impacted. Several rail and coal companies have warned their customers of disruptions, leading to potential supply shortages and price increases in international markets.

Responding to the Crisis: Government and Industry Actions

In response to the crisis, both the US government and private industry have taken swift actions to mitigate the impact and supply chain issues. President Biden assured the public that the government would “move heaven and earth to reopen the port and rebuild the bridge as soon as humanly possible,” but acknowledged that the process would take time. Federal agencies are working closely with local authorities to expedite the cleanup and reconstruction efforts.

The shipping industry has also adapted by rerouting cargo to other major ports along the East Coast. According to container shipping expert Lars Jensen, while Baltimore is one of the smaller container ports in the northeast US, handling 265,000 containers in the fourth quarter of last year, the flow of containers can be redistributed to bigger ports like New York, New Jersey, and Norfolk, Virginia. These ports, which handle millions of containers annually, have the capacity to absorb the redirected traffic, though logistical adjustments are necessary.

Maersk, the Danish shipping giant whose cargo the Dali was carrying, announced it would be “omitting Baltimore on all our services for the foreseeable future.” This decision underscores the long-term adjustments that shipping companies are making in response to the incident.

Efforts are also being made to support the workforce affected by the disruption. The Port of Baltimore is directly responsible for approximately 15,000 jobs and supports an estimated 140,000 more. Local and federal job programs are being mobilized to provide temporary employment and retraining opportunities for those impacted by the port’s shutdown.