BUFFALO, N.Y. — With our very connected world of imports and exports, the tragedy of the collapse of the Key Bridge in Baltimore could also have some economic impact on Western New York and the U.S. economy in general.
There is a stark video of some of the large cargo ships that are stuck in the harbor outside the Port of Baltimore. The access was affected due to the late-night bridge strike by that huge Singapore-flagged container ship which also caused the bridge to collapse.
While there is the tragic loss of human life, there is also an economic loss with that port for ocean-going ships now offline considering it handles an estimated 52 million tons of imported foreign goods each year. The CNBC Network says that adds up to $55.2B in 2023.
Professor Patrick Penfield who teaches supply chain management at the Syracuse University Whitman School of Business says it will be a very difficult situation.
"You're talking about maybe nine to ten million dollars a day when that port is not being used or ships aren't moving in and out. I would say with the additional suppliers and supply chain within the area you know - maybe tens of millions of dollars. So you're gonna see more delays, more issues in trying to get product and that's a dilemma. So the supply chain professionals will have to figure out how to re-route all this material to make sure that it gets to a different port."
Experts say some of those ships, already impacted by what's happening overseas with the Middle East conflict and congestion in the Panama Canal, may now have to make costly diversions to other ports like nearby Norfolk, Virginia, and especially the Port Authority of New York and New Jersey. There could be more delays and congestion there with added ship traffic at those already busy ports.
CNBC reports that major retailers like Home Depot, IKEA, and even Amazon could be affected. In addition, there could be issues with commodity imports like raw sugar for U.S. processors and gypsum used for drywall and fertilizer.
Penfield says speaking of agriculture, exports from farmers also flow out of Baltimore.
"That's the really important part of that port is it really is very easy to access from the Midwest. So you know all your farmers - if you're shipping corn or soybeans or any type of commodities probably are gonna ship that through the port of Baltimore if they trying to ship it overseas. Just because it's the easiest way to transport."
Finally and perhaps the biggest impact from this Baltimore port shutdown may be on automakers with ties to Western New York.
"Most of your major car manufacturers use that port. Nissan, GM, Volvo - almost all the car companies for the most part use that particular port to move in and out of cars. and car parts," Penfield says.
It's expected that the Port of Baltimore might be closed for months until ship access flowing into the Chesapeake Bay and the Atlantic is restored. Perhaps it is not the same supply chain disruption seen with the pandemic but who knows about extra costs and product and commodity prices.
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