U.S. Secretary of Transportation Pete Buttigieg said Wednesday morning on the Today Show of the Baltimore bridge collapse, “This will be a major and protracted impact to supply chains.” More like, “this will be a major and protracted news story that unnecessarily freaks people out about supply chains.”
The collapse was shocking and the deaths of six construction workers a tragedy, plus the people of Baltimore will no doubt remember it with sadness forever. But that’s another story.
What Happened
The exact failure of the container ship Dali is still unknown as of this writing, but the video images show a huge vessel losing its lights, and presumably power, briefly gushing black smoke from its funnels, getting its lights back, and then hitting the main bridge support. The bridge collapsed onto the bow of the ship in less than 10 seconds.
What It Means For Supply Chain: Ports
The Port of Baltimore is now closed with 40+ vessels stuck inside the fallen bridge, and all that were headed into port being rerouted. It is not known how long clearing the passage will take.
In terms of volume, Baltimore is not a vital U.S. port. It ranks 17th in total tonnage, 10th in dry bulk tonnage, and 15th in TEU volume. Alternative East Coast ports include New York, Charleston, Savannah, and Virginia, all of which are larger.
It is, however, a key port for roll-on/roll-off shipments which include cars, trucks, and farm equipment. This will create some problems for manufacturers like Deere and Caterpillar moving product to overseas markets. However these are finished goods, which means ripple effects like those in Europe when parts held up by Red Sea attacks stopped production at Tesla and Volvo plants, won’t be much of an issue this time. Also, commercial dealerships in the eastern U.S. may wait a bit longer for imported vehicles to arrive, but again, these are finished goods on their way to lots full of inventory.
The impact from this perspective will be minor compared to the post-Covid-19 crises that put supply chains on our collective radar.
What It Means For Supply Chain: Road
The accident also knocks out a major interstate highway for years, if not forever. That sounds terrible, but the bridge only carries 11 million vehicles per year compared to parallel north-south tunnel routes crossing the harbor, which combined carry almost 72 million vehicles per year. It is true that hazmat transport is prohibited in the tunnels, but the western loop of the Baltimore beltway is still there, adding about 15 miles to the Patapsco River crossing. Again, the impact on supply chains should be relatively minor.
What It Means For Supply Chain: Infrastructure
As for the argument that our infrastructure is “crumbling” and supply chains therefore “fragile,” the Key Bridge collapse is strictly symbolic. It was inspected in 2023, passing on over a dozen specific metrics of structural integrity, according to the U.S. DOT’s National Bridge Elements Health Index. It should be no surprise to anyone who saw the footage that the bridge couldn’t handle a direct hit from a container ship.
Our supply chain infrastructure does need more investment, but the collapse of this bridge is not proof of that idea.
Resilience And Vigilance Are Working
A silver lining, but disproportionately to the hysteria about supply-chains-in-trouble, was the fact that the ship signaled distress and within minutes police had stopped traffic in both directions. Not a single vehicle was lost.
Plus, technology-heavy logistics firms like Project44 and Flexport, which track and help manage global shipping for big companies, are already rerouting shipments that were headed to Baltimore. The Today Show report mentioned our more “resilient post-Covid supply chains,” but they failed to clarify just how far we’ve come since the much more severe U.S. West Coast port strike in 2015.
Supply chain managers are currently handling problems in much more important choke points, including the Suez Canal, Panama Canal, and in a worst-case scenario, East Coast U.S. port strikes. Covid-19 was indeed a supply chain crisis, but the system has hardened since then.
The Bottom Line
Plenty of actors have incentives to exaggerate the supply chain angle here. Buttigieg for instance, may prefer to err on the side of caution when describing the challenges ahead. Some commentators might also be tempted to fan the flames of inflation in hopes of influencing voters or policy makers. And of course, television news producers want to respond to public curiosity about this highly newsworthy event. The supply chain angle helps them all.
The public finally realizes that we are dependent on supply chains we once took for granted. It would be a mistake to lose their trust by crying wolf this time.
