Expensive, lengthy delays expected before Port of Baltimore can re-open to vessels following Key Bridge collapse

The collapse of the 47-year-old, 1.6-mile Francis Scott Key Bridge is going to have supply chain repercussions for months, if not longer, supply chain experts are saying.

Vessel traffic at the Port of Baltimore, an important East Coast trade hub, is suspended “until further notice,” the port said. The Port of Baltimore handled a record 52.3 million tons of international cargo, valued at $80.8 billion last year. It’s the 11^th-largest port in the country, and it tops in number of new vehicles coming in and out of America.

The Baltimore port handled 847,158 autos and light trucks in 2023. That’s the most of any U.S. port for the 13th straight year, according to a state of Maryland website. The port also handled large volumes of imported sugar, gypsum and coffee, as well as exported coal.

Officials are preaching patience while salvage crews and engineers figure out how to safely remove tons of concrete and steel to open the shipping channel to the strategically located Port of Baltimore.

“This will not take a month. This will take time,” Maryland Gov. Wes Moore (D) said at a press briefing.

Initial estimates for replacing the 47-year-old bridge over a key entrance way to the port were between two and 15 years. The discrepancy depends largely on how many pillars from the Key Bridge can be saved for the new bridge, engineers said.

Six of eight workers repairing potholes on the bridge were killed on March 26 when the Singapore-flagged Dali, a 32,000-ton ship built in 2015, lost power before hitting the Key Bridge. The Dali had around 4,900 containers on board at the time of the collision. It was en route to Colombo, Sri Lanka.

Officials have cited four priorities in getting the channel cleared of debris from the bridge and the containers removed from the Dali, a giant of a container ship weighing 200 million pounds and the size of the Empire State Building:

•   Opening maritime operations at the Port of Baltimore. At least 70 vessels inbound and currently in port are holding in place. Trucks are still moving through the facility, but vessel traffic is suspended until the channel is cleared;
•   Moving freight intended for the Port of Baltimore to other ports on the Eastern Seaboard, namely Norfolk and Philadelphia. There has been excess capacity at other ports in the region. No issues are expected with absorbing this freight, but it will mean longer transit times and added costs for many shipments;
•  Reducing downstream impacts on trucking capacity and rates. Since Baltimore is closer to the Midwest than any other East Coast port and just an overnight drive to one-third of the country’s population. Shipments will take longer and cost more, experts said; 
•  Managing over-the-road workarounds for truck traffic entering and exiting the port. Because hazardous materials are prohibited in Baltimore’s twin tunnels, hazmat trucks are facing a 51-mile detour around I-695, the Beltway that surrounds Baltimore; and
•  Truck traffic is facing delays indefinitely. The lone alternative for hazardous materials is a detour along the 51-mile Baltimore Beltway, Interstate 695. Non-hazmat trucks can detour through the Baltimore Harbor Tunnel, which has a height limit of just 13.5 feet or the Fort McHenry Tunnel, which has a traditional 14.5 feet height limit.

Experts say having a resilient supply chain is more necessary than ever to cope with world events that can test transport models.

The Baltimore tragedy is just the latest for logisticians to worry about. In the last nine months, supply chains have been disrupted by the closure of Yellow; the conflict and unrest in the Red Sea; low water levels in the Panama Canal that have limited cargo traffic and now the incident at the Port of Baltimore.

“This will test resiliency of everyone’s supply chains,” TranzAct founder Mike Regan told LM. “Capacity at other ports is not the issue. But transportation costs that were $50 to $100 for drayage out of the port will now be $100 to $200.”

Then there is what Regan calls the “velocity factor.” That means when assets are tied up for long periods, other rates will rise. This could be a help to truckload carriers, which have had excess capacity the last year or two. That should ripple down to the spot markets, he said. “Often companies are caught off guard because they ignore critical facts and assume that things will always be 'OK,'” Regan said. “When the inevitable surprises occur, they are forced to react and do things that can be very costly, harm their company's reputation and risk damaging their customers’ trust in their ability to deliver.”

Paul Wiedefeld, Maryland’s transportation secretary, said the Army Corps of Engineers is working on plans to open a single shipping lane. The estimate for that is between $40 million and $50 million due to the complexity of removing concrete and steel from the channel, and then offloading containers from the stricken Dali.

“If anyone is liable, you can be sure will go after them,” Sen. Chris Van Hollen, D-Md., said at a press briefing, adding he hopes bipartisan efforts in Congress will help. “This is an American challenge—not a Republican or Democratic challenge.”

More than two dozen experts from the National Transportation Safety Board (NTSB) are on site investigating. They have already retrieved the “black box” voice data recorder in an early attempt to understand why the Dali lost power and steering.

Some 56 of Dali’s containers were transporting hazardous materials, according to NTSB chairwoman Jennifer Homendy. Some hazmat containers may have entered the Patapsco River at the mouth of the Chesapeake Bay, she said.

“Hazmat traffic will be affected for a long, long time,” Regan said, noting the 51-mile detour around the Baltimore Beltway will end up costing shippers more in higher rates.

Coast Guard Vice Admiral Peter Gautier said clearing the shipping channel and reopening the port was the first job. He said that aligned with President Joe Biden’s “direction to get the port up and running as soon as possible.”

The port employs about 8,000 workers who are likely to be laid off until the port reopens.  Officials in Maryland were working on ways to compensate those workers idled during the port’s closure to vessel traffic.

The bridge, located about five miles from Fort McHenry, is about 300 yards from the spot in the river where Francis Scott Key wrote the “Star-Spangled Banner” during the Battle of Baltimore in 1814. It was built to prevent trucks carrying hazardous materials from going under the twin tunnels in Baltimore, and was a key link for many living near the port.

“It’s the blue-collar bridge,” former Baltimore Mayor Kurt Schmoke told the New York Times. “The Key Bridge was definitely for work.”