The recent bridge accident in Baltimore has caused a shutdown of operations at the Francis Scott Key Bridge, which is one of the busiest ports in the United States. This suspension of sea traffic passing through the port will have significant implications for global supply chains, as the Port of Baltimore is the ninth largest foreign cargo port in the country and the busiest car port, handling over 750,000 vehicles last year.
The CEO of the British Institute of Export and International Trade, Marco Forgione, expressed concerns about the potential ripple effects on global supply chains due to the port’s suspension in an interview with BBC. US Secretary of Transportation Pete Buttigieg also acknowledged that this incident will have a major impact on domestic supply chains. However, it is too early to assess the full extent of these repercussions.
In response to this disruption, major American car manufacturers such as General Motors and Ford have announced plans to redirect their car deliveries to other ports to mitigate its effects. While this shutdown may be significant for car shipments, it is smaller in terms of container traffic compared to larger ports in northeastern United States. Containers can easily be rerouted to those ports without significantly affecting global trade.
Experts suggest that container transport’s flexibility and excess capacity in ocean freight services will help cushion the shock to supply chains. Companies like UPS are well-prepared to reroute shipments to alternative ports and modes of transport to ensure that goods continue moving smoothly throughout this crisis.
While disruptions like corona pandemic and Suez Canal incident have challenged global supply chains in recent years, experts believe a similar crisis is unlikely in this case due to East coast ports’ readiness to assist ships meant for Baltimore. This assistance minimizes any significant impact on US gross domestic product or inflation rates. Despite being more economically affected by this bridge disaster than other regions within the country, experts predict it will not have a significant impact on US GDP or inflation rates overall.
