The bridge collapse stands to snarl shipping along the East Coast for months, reports The Wall Street Journal (March 27, 2024). Companies that transport cars and coal, two of the key cargoes that run through Baltimore, are already looking for alternative destinations. The Maryland governor said it would take a “long-term build” to replace the bridge. “There’s no question that this will be a major and protracted impact to supply chains,” said the U.S. Transportation Secretary.
The Port of Baltimore is the 17th largest in the nation. It handled 52.3 million tons of foreign cargo worth nearly $81 billion in 2023, and creates more than 15,000 jobs. Some 800,000 vehicles passed through the port in 2023, making it the top port in the nation for auto shipments. The port ranks second in the country for exporting coal and is a niche port for tofu and soybeans.
All vessel traffic in and out of the Port of Baltimore is suspended. Ports in Norfolk, Va., and the New York and New Jersey area are expected to pick up most of the diverted ship traffic. All East Coast ports have become more important in recent years as the U.S. attempts to boost its trade with friendly nations and reduce geopolitical risks related to trade with China, which generally happens via West Coast ports.
Baltimore port’s suspension is one more disruption in an already-stressed system for the global supply chain. Cargo will now have to be rerouted to other ports, which means figuring out where there is enough capacity to move things. The biggest problem is the effect on other ports. Many ships stuck in the port were destined to make stops at other U.S. ports to load and unload goods before heading overseas, a complicated logistical dance now scrambled.
Classroom discussion questions:
- How can supply chain managers deal with a situation like this (which we call a “super-event” in Supplement 11 of your Heizer/Render/Munson text)?
- What other events that have impacted global shipping have taken place in recent years? (Hint: think canals)