The Baltimore bridge disaster will challenge the nation’s supply chain to show whether its struggles during the pandemic have left it more resilient.
Shipments originally meant for Baltimore will now be shifted elsewhere, with the ports of Savannah and Brunswick likely to see at least some additional business in coming weeks as companies scramble to adjust.
“The immediate impact is the tightening of the supply chain,” said Aleksandar Tomic, associate dean for strategy, innovation and technology at Boston College. “They are already dealing with Yemen, the attacks of the Houthi on shipping. This is not going to help at all.”
First responders continued to search Tuesday afternoon for people missing since the container ship Dali struck the Francis Scott Key Bridge early Tuesday morning. Maryland and federal officials vowed to rebuild the bridge, a vital thoroughfare for the Baltimore region, though that is likely to take years.
“We don’t have any estimates on timeline,” Maryland Gov. Wes Moore said during a Tuesday morning news conference. “Our exclusive focus is on saving lives, search and rescue.”
Ships that haven’t left foreign ports can be redirected to other ports. Ships on the water and headed toward Baltimore will also need to be diverted. But not all ports can handle every kind of cargo.
“The big question is, who can handle it?” Tomic said. “But there are a lot of ports, from New York to Miami, and there probably won’t be a need to send ships to the West Coast.”
In a statement, Sandy Springs-based UPS said it will do what needs to be done to keep the packages flowing.
“This is a terrible tragedy,” the statement said. “Our thoughts are with everyone impacted, and we thank the first responders for all they’re doing. We will continue to monitor the situation and will adjust our business operations as needed.”
The Port of Baltimore last year handled 52.3 million tons of foreign cargo worth $80 billion and handled 1.1 million 20-foot equivalent containers (TEUs), ranking ninth nationally, while ranking first for auto imports and exports, according to Maryland officials.
The Port of Savannah last year handled more than 4.9 million TEUs and is the second-busiest port on the East Coast.
The Port of Brunswick, which specializes in vehicles, last year rolled more than 775,000 autos and heavy machinery units on and off ships.
Credit: Georgia Department of Economic Development
Credit: Georgia Department of Economic Development
Georgia Ports Authority CEO Griff Lynch said ports located closer to Baltimore geographically, such as New York-New Jersey and Norfolk, would likely absorb the Baltimore-bound container business, but that Savannah and Brunswick could be called on to handle additional “roll-on, roll-off” vessels rerouted from Baltimore.
Cargo from those ships — automobiles and wheeled heavy machinery — take up a significant amount of acreage on terminals and many facilities are not set up to accommodate them. Lynch said Ocean Terminal in Savannah and Colonel’s Island Terminal do have space.
“Baltimore is the only terminal that can claim to do more autos than we do so there is the potential for supply disruption that we could help eliminate there,” Lynch said.
Earlier this year, Lynch set a goal for Brunswick to surpass the Port of Baltimore as the top spot for auto imports and exports.
The collapse of the Key bridge, in addition to being a human tragedy, is a logistics headache. Closure of the Port of Baltimore, even temporarily, does not only force re-direction of shipments, it also means that re-directed shipments will need to be sent to different distribution centers and handled by different logistics companies on their way to their destinations.
Four years ago, the pandemic stressed, strained, stretched and — in some cases — broke the global supply chain. The onslaught of COVID-19 and the inconsistent responses across the world sometimes closed factories, trimming supplies of goods, while also radically reshaping the amount and kinds of goods that consumers were buying.
At times, lines of ships extended into the ocean at busy ports like Savannah, sometimes anchoring for days as they waited to unload.
Problems created by the closure of one port is simply not on that scale, but it is not a challenge that can be immediately solved, said Nikolay Osadchiy, professor of information systems and operations management at Emory’s Goizueta School of Business.
“I would say it will take months to straighten out,” he said.
Pandemic challenges forced many companies to rethink their business, sometimes moving production closer to their markets, sometimes allowing more time for shipments or switching to more efficient ports.
Still, that is only partial preparation for a shock like the bridge disaster, Osadchiy said.
“The supply chain is better today because firms are paying more attention,” he said. “But nobody can predict this kind of thing, so it’s difficult to react.”
For companies shipping from elsewhere, the inconvenience will be manageable, but companies with shipments trapped in Baltimore or actually on the ship that hit the bridge could have serious trouble, he said.
“They will have their shipments delayed and their competitors will take advantage of that,” Osadchiy said.
-Staff writer Adam Van Brimmer contributed to this report.
