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Added Costs, Logistics Complicate Port Closure

The Port of Baltimore has been closed for more than 10 days following the collapse of the Francis Scott Key Bridge, and the costs and headaches are piling up, according to The Wall Street Journal (subscription).

What’s going on: “The effort to locate shipments, find new ports and patch together new transportation is part of a massive logistics undertaking in and around one of the U.S. East Coast’s biggest ports. It takes in operators including major automakers around the world, local truckers and railroads, as well as a range of exporters and importers trying to contain the impact of the latest disruption to hit global supply chains.”

  • The bridge was destroyed after a Singapore-flagged container ship bound for Sri Lanka hit it in the early hours of March 26.
  • Some vessels remain at berth in Baltimore’s port, which should be partially reopen for vessel traffic by the end of this month, the U.S. Army Corps of Engineers said Thursday, according to POLITICO.

Why it’s important: The economic impact on trade is around $1.7 billion per week, business analytics group Dun & Bradstreet estimated.

  • Although other East Coast ports, including New York–New Jersey and Savannah, Georgia, are taking Baltimore-bound cargo, the diversions will raise prices for shippers and logistics operators.
  • Several shipping lines have declared force majeure, meaning they will not pay for the additional cost to send ships to other locations.
  • Some automotive manufacturers that use Baltimore are redirecting shipped equipment to Virigina and then trucking it back to Baltimore for final assembly, increasing its costs, in one case, more than sixfold.

Looking to trucks: The main challenge for the next few months, the president of one logistics provider told the Journal, “will be to find trucks at decent rates because of the increased demand for road transport in the region.”

Our take: “The NAM is engaging with key stakeholders regarding supply chain impacts following the collapse of the Francis Scott Key Bridge,” said NAM Director of Domestic Policy Max Hyman. “We recently convened industry partners, senior agency officials and congressional staff for the first of several discussions on recovery efforts and will continue to provide regular updates to our membership.”

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