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Baltimore bridge collapse reverberates from cars to coal

Bloomberg
Bloomberg • 5 min read
Baltimore bridge collapse reverberates from cars to coal
The Singapore-flagged Dali / Photo: Bloomberg
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The 1.6 mile-long bridge collapsed in a matter of seconds. The catastrophic consequences are set to stretch out for weeks. 

As much as 2.5 million tons of coal, hundreds of cars made by Ford Motor Co, and General Motors Co, and lumber and gypsum are threatened with disruption after the Singapore-flagged container ship Dali slammed into and brought down Baltimore’s Francis Scott Key Bridge in the early hours of Tuesday. 

Six people were presumed dead after a search in the Patapsco River, officials said Tuesday evening. The toll could have been worse except for a mayday call from the Singaporean-flagged vessel as it lost power. 

A major commuter bridge in Baltimore collapsed after being struck by a container ship, causing vehicles to plunge into the water.

The aftermath of the bridge’s collapse throws another spotlight on the fragile nature of global supply chains that have already been strained by drought in Panama and missile attacks on Red Sea shipping by Yemen-based Houthi militants. Docks in New Jersey and Virginia face the threat of being overwhelmed by traffic that’s being forced away from Baltimore, one of the busiest ports on the US East Coast. 

“It’s a large port with a lot of flow through it, so it’s going to have an impact,” John Lawler, Ford’s chief financial officer, told Bloomberg TV. “We’ll work on the workarounds. We’ll have to divert parts to other ports along the East Coast or elsewhere in the country.”

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Baltimore only handled about 3% of all East Coast and Gulf Coast imports in the year through Jan 31, said S&P Global Market Intelligence. But it’s crucial to cars and light trucks with European carmakers such as Mercedes-Benz Group AG, Volkswagen AG and BMW operating facilities in and around the port. It’s also the second-largest terminal for US exports of coal, with a shutdown potentially hitting shipments to India.  

About a dozen large vessels are stuck inside Baltimore’s harbor as well as a similar number of tug boats, according to IHS Markit and Wood Mackenzie’s Genscape. The list includes cargo ships, automobile carriers and a tanker named the Palanca Rio. 

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Port of Baltimore Closed Indefinitely After Bridge Collapse | Cargo ships and most of Baltimore’s shipping infrastructure are trapped behind the downed Key Bridge, except for the Tradepoint Atlantic Terminal

That’s just the impact on the port. 

About 35,000 people used the bridge every day. The annual value of goods going over is about US$28 billion, according to the American Trucking Associations. 

“We rely on our infrastructure systems for our daily needs, for a huge amount of the goods that we get in the United States from overseas and to have it cut off so suddenly, it’s a huge crisis,” said Yonah Freemark, a researcher at the Urban Institute.

The Francis Scott Key Bridge, named for the man who wrote the text of the Star-Spangled Banner, took five years to build and was completed in 1977. The cost at the time was around US$141 million, according to one estimate. A rebuild today is likely to cost “several billion dollars,” said Freemark. 

President Joe Biden said he wants the federal government to pay and vowed “to move heaven and earth to reopen the port and rebuild the bridge.” 

But Baltimore is in for a lengthy reconstruction. It could be weeks before any port operations resume as officials need to remove bridge debris and the 984-foot Dali from the river. 

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That’s expected to accelerate a shift of cargo to the US West Coast to avoid bottlenecks from Boston to Miami. A sudden 10% to 20% increase in volumes through a port is enough to cause massive backlogs and congestion, according to Ryan Petersen, the founder and chief executive officer of Flexport Inc., a digital freight platform based in San Francisco.

Traversing Maryland, meanwhile, threatens to create headaches for motorists and truckers. A trip from Edgemere heading south to Glen Burnie was about 15 miles over the bridge. It’s 20 miles via the Baltimore Harbor Tunnel. The trip will be even tougher for truckers hauling hazardous materials, which are barred from the tunnel. They’d have to travel 45 miles on the Baltimore Beltway. 

The biggest hit though could be to Baltimore itself, a city of close to 600,000 people whose stagnation and high-poverty neighborhoods were made famous by television show The Wire.  

The bridge helped connect major parts of Baltimore and was key to its renaissance as a logistics and e-commerce hub after the shuttering of its steel industry. With its deep-water port, shortline railway, and well-located interstate highway, the city attracted investors who have been pouring money into redevelopment. 

One of the largest projects, Tradepoint Atlantic, has leased millions of square feet in warehouse space to some of the world’s biggest businesses, including Amazon.com Inc. and FedEx Corp.

Facing months of uncertainty, Baltimore and Maryland both declared a state of emergency. 

Throughout the morning on Tuesday, crowds gathered in east Baltimore County, camping out in grassy spots or climbing highway guardrails to get a better look of the bridge and snap photos. Across the street from a Dollar General on Dundalk Avenue, residents discussed the roar of the structure collapsing, comparing it to a jet engine during takeoff.

Not far from the collapsed bridge, police changed shifts at the dock of the Hard Yacht Cafe in Dundalk. Officers getting off their boat had been circling the waters as part of the rescue effort for more than 10 hours, they said, adding that divers were searching for remaining victims in the water when they left the scene. 

“This is one of the cathedrals of American infrastructure,” said US Transportation Secretary Pete Buttigieg. “The path to normalcy will not be easy, it will not be quick, it will not be inexpensive, but we will rebuild together.”

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