The Francis Scott Key Bridge in Baltimore collapsed after it was struck by a container ship on March 26, and industry experts say the crash could impact ocean freight shipping rates for local and international businesses as ships divert to alternate ports and customers turn to rail and trucks.
The collapse led to the closure of the Port of Baltimore, certainly one of the most important East Coast ports in the USA by volume of cargo that passes through. Mayor Brandon Scott declared a State of Emergency — to stay in place at the very least 30 days — following the collapse.
In 2023, the port imported $55.2 billion in cargo and exported $80 billion, a record for town, Governor Wes Moore said in an announcement. It’s the Eleventh-largest port within the country.
Baltimore bridge collapse’s impact on shipping rates
Imports scheduled for the Port of Baltimore will likely be diverted to other East Coast hubs like Recent York; Norfolk, Virginia; or Philadelphia, said Judah Levine, head of research at online freight shipping marketplace Freightos.
Although Baltimore handles a smaller volume than those ports, the diversions could cause congestion and delays, he said. Ocean freight is entering its “slow season,” Levine noted, so it’s likely that the ships can visit other ports as a substitute without causing significant disruptions.
The diversions will “not create any serious supply chain problem, but things may take a day or two longer and price just slightly bit more,” ShipMatrix president Satish Jindel said in an interview. ShipMatrix tracks shipping volume and on-time performance amongst parcel-delivery corporations.
Baltimore only handles about 13% of the quantity that goes through Recent York and Recent Jersey, Freightos found.
Nonetheless, if there may be congestion, accompanied by long wait times, it could push up freight rates between Asia and the U.S. East Coast and Europe and the U.S., in line with Levine.
Freight rates between Asia and the U.S. East Coast are greater than twice as high as they were in 2019. That’s due partially to diversions from the Red Sea due to Houthi attacks on cargo ships. Rates peaked in February and have since fallen 22% to their current level of $55,284 per 40-foot equivalent unit container (FEU).
Transatlantic rates are about comparable to 2019 rates at $1,659 per FEU, in line with Freightos.
UPS posted a service alert noting that the bridge impacted its ocean freight.
“Ocean container vessels with Baltimore as a port of call could also be rerouted to alternative ports,” the alert said. “Congestion and delays must be expected throughout the US East Coast, including at Norfolk and Recent York/Recent Jersey. Attributable to this example, additional expenses and repair delays could also be incurred for current and future shipments.”
Exporters can even need to reroute shipments by truck or rail to other nearby ports, Levine said. They, too, could face increased rates as others make the identical move.
Auto industry
Baltimore serves a large portion of the auto industry through its port, Jindel said, alongside farm and construction vehicles. In 2023, 847,158 cars and trucks traveled through the Port of Baltimore, greater than every other U.S. port, Gov. Moore said.
Nissan, General Motors, Volvo, Volkswagen, Toyota and Jaguar Land Rover all ship cars through the Port of Baltimore.
The disruption could also impact Baltimore’s coal exports, which topped 20 million tons last 12 months.
“There could also be a slight delay in total travel time, but coal just isn’t an urgent commodity,” Jindel said.
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