On March 26, the Maersk-operated container ship DALI crashed into the Francis Scott Key Bridge in the outer harbor of Baltimore, Maryland, United States. The crash led to the total collapse of the bridge into the harbor and upended operations at the Port of Baltimore. The closure will disrupt the hundreds of vessels that transit through the port each month and will contribute to congestion at other East Coast ports as vessels are forced to divert. The collapse of the I-695 roadway is also expected to disrupt ground transportation passing through Baltimore.
Port of Baltimore closure disrupts flow of vehicles and raw materials
The collapse of the Key Bridge at the entrance to the Port of Baltimore has halted port operations indefinitely. As no terminals at the port are accessible, future loading and unloading operations are not possible. However, landside truck operations continue to retrieve existing cargo from the port to clear the current backlog. The U.S. Coast Guard has indicated that the port will be closed for a minimum of two weeks, but shipping intelligence suggests that the port is likely to remain closed for much longer due to the severity of the collision.
The Port of Baltimore is among the 15 largest ports in the U.S. and is the largest U.S. port for automotive and light truck shipping by number of vehicles handled annually. The port also handles most of the U.S. East Coast’s market share of Ro/Ro cargo annually. About 70% of the vehicles handled at the port are imports, most of which originate in Germany, Mexico, Japan, and the United Kingdom. It is also the closest east coast port to the U.S. Midwest and is considered a critical link to industries located there.
Key industries that rely on continuity at the Port of Baltimore include steel, aluminum, sugar, automotive, and agricultural equipment. Over 850,000 vehicles from General Motors, Ford, Nissan, Toyota, Volkswagen, and Honda transit through the Port of Baltimore each year. General Motors and Ford confirmed plans to reroute vehicle shipments to other nearby ports, while the Volkswagen Group and BMW indicated that their ground transport may be most impacted by the collapse of the I-695 roadway. Toyota has indicated that while most of their shipping operations are located elsewhere, some exports are likely to be delayed.
Additionally, the Port of Baltimore is an important transit point for raw materials. One of the largest sugar refineries in the U.S., operated by Domino Foods, is located at the Port of Baltimore, and relies on inbound raw materials through the port. The company has indicated that it does not expect immediate production impacts following the port closure, but it will deplete its raw sugar stockpiles after around six to eight weeks.
Further, Baltimore handles 20% of U.S. coal exports to markets in India, the Netherlands, and Japan. During the first nine months of 2023, Baltimore exported about 20.3 million short tons of coal, up from 14.3 million short tons during the same period in 2022. About 13.3 million of that is made up of steam coal, and the remainder of metallurgical coal. The bridge collapse is expected to disrupt the port’s coal exports for as many as six weeks and will block the transport of up to 2.5 million tons of coal. India is expected to suffer the most from Baltimore’s blocked coal exports, as the country relies on the port for roughly 13% of its coal supply.
Vessel diversions impact other U.S. East Coast ports
Ports located along the U.S. east coast may see elevated levels of congestion amid prolonged vessel diversions from Baltimore. Vessels are rerouting to neighboring ports including the Port of New York and New Jersey, the Port of Philadelphia, and the Port of Norfolk, Virginia. Although these ports confirmed that they have capacity to handle additional inbound shipping loads in the short term, an extended Baltimore port closure would disrupt vessel schedules and strain labor and port handling capacities.
The closure of the Baltimore Port comes at a time of uncertainty at U.S. East Coast ports due to the ongoing threat of a coordinated port worker strike. Members of the International Longshoreman’s Association (ILA) have threatened to strike over ongoing contract negotiations, with strike action possible after the union’s contract expires on September 31. Although a potential strike remains several months in the future, some shippers have already begun to divert cargo away from the U.S. East Coast in anticipation of delays. Though not likely, if the Port of Baltimore remains closed long enough to coincide with the coordinated labor action across the east coast, diversions to U.S. West Coast ports may occur on an unprecedented scale.
Closure of I-695 highway disrupts ground freight in Baltimore
The Key Bridge is a vital section of the I-695 roadway, the interstate highway that serves as a full beltway around the perimeter of metropolitan Baltimore. The bridge was considered a crucial link between the industrial facilities located near or at the port and I-95, the major U.S. East Coast interstate highway system which stretches from Miami to the U.S.-Canada border. Nearly 4,900 cargo trucks crossed the bridge every day, with goods valued at $28 billion (€25.8 billion) annually.
Local government officials are rerouting traffic through nearby underwater tunnels; however, carriers of hazardous materials and chemicals such as petroleum are banned from these tunnels. Rerouting around the bridge and tunnels will add approximately 30 miles (48 kilometers) of detours for transporters of hazardous materials.
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