The economic impact of the collapse of the Francis Scott Key Bridge in Baltimore – which left six dead and one seriously injured – will be hefty.
The immediate price tag: $2 million dollars in wages a day and 8,000 jobs, according to Transportation Secretary Pete Buttigieg.
“Rebuilding will not be quick or easy or cheap,” Buttigieg told reporters at the White House on Wednesday.
The area is a critical one for America’s economy. Ranked the United States’ largest vehicle handling port, the Port of Baltimore offers the deepest harbor in Maryland’s Chesapeake Bay. Closer to the Midwest than any other East Coast port, the Port of Baltimore also is within an overnight drive of one-third of the nation’s population.
Between $100 million and $200 million of cargo passes through the port every day. With that coming to standstill, many longshore workers could be unemployed, Buttigieg warned this week.
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“About $2 million in wages… are at stake every day. And that’s one of the areas we’re mostly concerned about,” the transportation secretary explained.
“These longshore workers, if goods aren’t moving, they’re not working,” he added.
Companies are coping with the tragic disaster by rerouting shipments to other East Coast ports. About 4,000 commercial trucks a day used the bridge, and detours are expected to increase delivery times and fuel costs, according to Oxford Economics.
A major response
The bridge collapsed at 1:30 a.m. Tuesday after being struck by a massive container ship, about 985-feet long.
Buttigieg said the Coast Guard, in coordination with the Army Corps of Engineers, will coordinate on the channel cleanup and the reopening. However, he didn’t immediately offer a timeline for the reopening of the port or the rebuilding of the bridge, which took five years to finish in the 1970s.
President Joe Biden has called for the federal government to foot the bill to rebuild the bridge, which Congress would have to approve.
But that shouldn’t be a barrier for work to begin soon, Buttigieg said Wednesday. The Bipartisan Infrastructure Law, a sweeping piece of legislation targeting America’s infrastructure signed into law in 2021, has authorized funding for the Transportation Department’s emergency relief program.
The Port of Baltimore is the 10th largest in the U.S. based on container imports, according to Moody’s Analytics. It’s the No. 1 port in the nation for vehicles. Last year, it handled a record 847,158 cars and light trucks, according to Maryland Governor Wes Moore’s office.
The facility also handled 1.3 million tons of farm and construction machinery, the most of any port in the nation, and it employs about 15,000 workers.
Will the Baltimore bridge collapse cause supply chain disruptions or price hikes?
Oxford Economics doesn’t expect the reshuffling to have any material impact on the nation’s $28 trillion economy or economic growth this year. Experts from both Oxford and JPMorgan Chase said they expect the shifts likely will push up prices, especially for vehicles, but the effects should be “minimal.”
On the East Coast, only ports in New York; Newark, New Jersey and Jacksonville, Florida, have the capacity to handle the diverted vehicles as well as the farm and construction machinery that flowed through Baltimore, said Chris Tang, faculty director at the Center for Global Management at the University of California, Los Angeles.
Yet the docks at those ports are already brimming with imported cars and light trucks because of slow sales of electric vehicles and SUVs in the U.S.
“They need to get them off the docks because there’s no room,” he said.
To relieve the logjam, manufacturers or dealers could offer car buyers incentives to goose sales and move vehicles off dealer lots, creating space for those rerouted from Baltimore, Tang noted.
As a result, while prices could edge higher for some vehicles, others could be discounted. And the Biden administration, Tang suggested, could offer manufacturers and dealers subsidies to provide the incentives.
Shipments:
The Port of Baltimore is one of the busiest in the country. Last year, it handled 52.3 million tons of foreign cargo, worth $80 billion, making it “one of the largest economic generators in Maryland,” Maryland Gov. Wes Moore boasted in February.
Shipments coming into and out of the port last year included some of the nation’s largest shipments of agricultural equipment and coal, and the largest amount of automobiles and light trucks ― about 847,000 total ― by any U.S. port for the 13th year running, according to the Maryland Port Administration and the governor’s office.
A few U.S. automakers who move vehicles through the port told Reuters they will reroute shipments to other ports amid the port’s closure. Most companies have said their car shipments will be minimally or not at all impacted,
Employment:
The Port of Baltimore annually generates nearly $3.3 billion in total personal income. It supports about 15,000 jobs directly and some 139,000 jobs connected to port work, according to state data.
These jobs include about 2,400 unionized dockworkers who are daily hires, meaning they’re without work and pay when there’s no cargo to move, said Scott Cowan, president of the International Longshoremen’s Association Local 333 in Baltimore.
“It’s a scary situation,” Cowan told HuffPost on Wednesday. “Obviously we don’t have to wait for the bridge to get rebuilt, it’s more of the shipping channel being cleared out and I don’t know how long that’s going to take.”
Those planning to reroute shipments reportedly include General Motors and Ford.
“It’s going to have an impact,” John Lawler, Ford’s chief financial officer, told Bloomberg News. “We’ll work on the workarounds. We’ll have to divert parts to other ports along the East Coast or elsewhere in the country.”
A spokesperson for Toyota told HuffPost that while Baltimore is not a primary port for the company’s North American operations, “there will be some impact, primarily on vehicle exports.”
“At this time, we do not anticipate a significant disruption, but we are evaluating the situation closely to determine the longer term impact and countermeasures,” the spokesperson said in a statement.
In addition to automobiles, the port is also a key import-export point for farm and construction machinery.
Local roadways:
The 1.6-mile, 4-lane Key Bridge had been a major artery in the Baltimore Harbor, with around 11.3 million vehicles traversing the I-695 roadway annually, or about 31,000 vehicles a day. The bridge, which opened in 1977, was built after the Baltimore Harbor Tunnel reached capacity, according to the Maryland Transportation Authority.
Maryland transit authorities have been recommending alternative routes and advising drivers to prepare for extra commuting time “until further notice.”
Drivers are being directed to use the I-95 and I-895 tunnels to cross the harbor while vehicles carrying hazardous materials, which are prohibited in the tunnels, are directed to drive around the city using the western section of I-695.
One local official in the Delmarva Peninsula, southeast of Baltimore, has speculated that there will be increased traffic in surrounding regions as well, with vessel cargo likely rerouted to Norfolk, Virginia; Wilmington, Delaware; and Philadelphia.
“I think we’ll see a tremendous increase, not only commercial truck traffic but general traffic as a whole,” Salisbury Area Chamber of Commerce President Bill Chambers told Maryland station WMDT.
Cruise lines:
The port last year saw more than 444,000 cruise passengers, with the industry supporting more than 400 jobs and contributing more than $63 million to the state’s economy, according to the MPA.
Carnival Cruise Line said it is temporarily moving its Baltimore embarking and returning ships to Norfolk. Passengers are being offered complimentary bus service between Baltimore and the Virginia port.
Royal Caribbean’s Vision of the Seas set sail from Baltimore on March 23 for a 12-night cruise and is expected to return to the same port on April 4. A Royal Caribbean spokesperson did not immediately respond to a request for comment on if and how that itinerary may change.
American Cruise Lines, which operates cruises in the Chesapeake Bay area, said its next trip planned out of Baltimore is scheduled in May. A company representative told HuffPost the company will continue to monitor the situation and make adjustments if needed.
The Effects Expected From The Baltimore Bridge Collapse
State and federal officials have stressed that fully reopening the nearby Port of Baltimore and rebuilding the bridge are the top priorities, second only to efforts to recover the bodies of workers thought to have been swept into the Patapsco River.
But authorities have also acknowledged that rebuilding the bridge won’t come quickly, cheaply or easily. And they’ve declined to say how long it may be before the port fully resumes operations.
Here’s What We Know So Far
- The bodies of two workers were recovered from the water of the bridge collapse site. The victims were identified as Alejandro Hernandez Fuentes, 35, and Dorlian Ronial Castillo Cabrera, 26.
- The vessel had undergone a routine engine maintenance check in the port. The Coast Guard says it was informed about the check but not of any problems with the vessel.
- It is still unclear what caused the power issue on the vessel moments before its collision with the bridge.
- Investigators have recovered a data recorder, or black box, from the ship, which will be used to collect evidence.
- The in-water search was stopped at around 4 p.m today because divers were unable to safely navigate around the superstructure in the water, which is believed to be encasing vehicles.
- Divers will return to the water once the superstructure is removed.
Baltimore Mayor Warns Against Spreading Bridge Misinformation
During a press conference on Wednesday, Baltimore Mayor Brandon Scott asked people to have “decency and respect” with regard to the bridge collapse and cautioned against spreading misinformation.
“I’m also asking for folks to have a little bit of decency and respect. Don’t spread misinformation, don’t play bridge engineer online or in the media,” Scott said. “Remember that these are people’s family members who lost their lives simply trying to make transit better for the rest of us.”Vessel Underwent ‘Routine Engine Maintenance,’ Coast Guard Says
The ship that crashed into the Francis Scott Key Bridge underwent “routine engine maintenance” while it was in the port, U.S. Coast Guard Rear Admiral Shannon Gilreath said in a press conference Wednesday evening.
The Coast Guard had been informed about the maintenance check but not about any problems with the vessel.
There is no confirmed answer on what caused the power issue leading up to the ship’s collision with the bridge, Maryland Gov. Wes Moore said in the press conference.How Did A Cargo Ship Send A Massive Bridge Tumbling Into The River? Experts Weigh In.
It will likely take weeks or months for federal investigators to sort out exactly what led to a container ship striking and collapsing the Francis Scott Key Bridge in Baltimore, Maryland, on Tuesday. But shipping industry experts, engineers and law enforcement have started to glean information from videos, photos and accounts of the disaster.
The accident appears to have resulted from a perfect storm of mechanical failures, dated bridge design, and unfortunate timing and location.President Biden Meets With Key Officials On Bridge Collapse
President Joe Biden spent part of Wednesday meeting with top officials to discuss “the coordinated federal, state and local response to the collapse” of the bridge.
According to a White House pool report, the president met with United States Coast Guard Vice Admiral Peter Gautier and Transportation Secretary Pete Buttigieg. He also spoke with General Scott Pellmon and Maryland Gov. Wes Moore.
“[Biden] reiterated that his administration will be with the people of Baltimore every step of the way,” the White House said of the president’s conversation with Moore.