June 13, 2024

Global Supply Chain Disrupted by Port of Baltimore Shutdown: How the Francis Scott Key Bridge Collapse Is Affecting Major Car Manufacturers and Trade

2 min read
One of the busiest ports in the United States is closed after a bridge collapse – Here’s the impact

The recent shutdown at the Port of Baltimore has caused significant disruptions in global supply chains, with experts predicting major repercussions if not resolved promptly. The Francis Scott Key Bridge collapse on Tuesday halted operations at one of the United States’ busiest ports, situated at the entrance of Baltimore Harbor. As a result, sea traffic has been suspended until further notice.

Despite being the ninth largest foreign cargo port in the US, the Port of Baltimore is renowned as the busiest car port in the country. Last year alone, over 750,000 vehicles were imported and exported through this port, including cars from major manufacturers such as General Motors, Ford, Jaguar Land Rover, Nissan, Fiat, and Audi.

The impact on global supply chains was acknowledged by US Secretary of Transportation Pete Buttigieg and CEO Marco Forgione from the British Institute of Export and International Trade. Major car manufacturers like General Motors and Ford have already started redirecting their deliveries to other ports while cargo ships bound for Baltimore are exploring alternative sea routes.

Despite the disruption caused by the bridge collapse, experts point out that there is currently overcapacity in ocean freight services. This helps cushion the shock to supply chains caused by the port shutdown. Recent disruptions in global supply chains such as the Suez Canal blockage and COVID-19 pandemic have led to contingency plans being put in place for various scenarios. Many east coast ports have assured that they can accommodate diverted shipments bound for Baltimore, minimizing potential economic impacts at a national level.

Chief US economist Ryan Sweet from Oxford Economics believes that while there will be localized economic impacts in Baltimore area due to bridge collapse but its effects on overall US economy will be minimal with no significant effects on inflation and GDP prediction suggests that supply chain disruptions can be managed effectively in coming weeks with proper contingency planning and redirection of shipment to other available ports

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