Baltimore’s bridge accident could lead to automobile supply chain delays for several companies including Nissan, Ford and Jaguar Land Rover, among others.
ADVERTISEMENTThe collapse of the Francis Scott Key Bridge in Baltimore, US, due to a container ship collision, has led to increased worries about worldwide supply chain disruptions. The ship, called the Dali, is estimated to have experienced a power issue shortly before the accident, which took place on Tuesday morning.
The Francis Scott Key Bridge lies across the entrance to the Port of Baltimore, which is a crucial port for automobile exports in the US. The port saw more than 47 million tonnes of foreign cargo in 2023.
Marco Forgione, director general at The Institute of Export and International Trade, as reported by the BBC, said: “Over 750,000 cars and vehicles transited through Baltimore in the last year. Those are major US brands and UK and EU brands, from General Motors and Ford to Jaguar Land Rover, Nissan, Fiat and Audi."
"In addition, Baltimore is a significant exporter of liquified natural gas (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.”
What does this mean for global supply chains?
President Biden has reassured consumers that all possible efforts would be made to repair the bridge and reopen the port as soon as possible. However, an exact timeframe has not been provided as of now, which has led to more anxieties about the impact of the port closure on global supply chains.
The collapse is likely to impact automobile supply chains, through both imports and exports usually processed by the Baltimore port. Within the US, the effects could mainly be felt up and down the east coast.
However, eventually, other major east coast ports such as the New York and New Jersey, Charleston, Savannah and Virginia ports, amongst others, are likely to pick up the slack.
It is also likely to impact coal and LNG imports and exports, with several coal and rail companies such as Consol Energy and CSX already warning investors about potential shipment delays. However, some LNG companies such as Berkshire Hathaway’s Cove Point, have said that they would not be impacted.
In the medium-term, some sugar companies such as ASR Group could also face delays, due to the company only having about six to eight weeks of raw sugar stocks in place at its Baltimore sugar refinery.
Some major shipping companies, such as Maersk, whose cargo the Dali was transporting, have already revealed that they would be crossing Baltimore off their routes for the coming future.
In a statement, Maersk said: “We are omitting Baltimore on all our services for the foreseeable future, until it is deemed safe for passage through this area. For cargo already on water, we will omit the port, and will discharge cargo set for Baltimore, in nearby ports.
“For cargo set to discharge in Baltimore, delays may occur, as they will need to discharge in other ports. We are keeping a close eye on the safety situation in the area and continuing to assess the viability of transportation through the area.”
