Mar 27, 2024 - Economy

Unpacking the economic fallout from the Baltimore bridge collapse

The remains of the Francis Scott Key Bridge on March 26, 2024 in Baltimore

The remains of the Francis Scott Key Bridge in Baltimore. Photo: Michael A. McCoy for The Washington Post via Getty Images

The tragic bridge collapse in Baltimore on Tuesday closed a vital throughway for the nation's commerce.

The big picture: It may complicate shipping logistics along the East Coast as shippers divert to other nearby ports — but the economic disruption doesn't look like the type of threat to broader supply chains that could cause widespread shortages and price spikes.

Why it matters: The unsnarling of supply chains was a notable disinflationary tailwind. While unknown shocks could threaten that progress, this bridge collapse — at least so far — doesn't appear likely to be one of them.

What they're saying: The collapse "is another reminder of the US vulnerability to supply-chain shocks, but this event will have greater economic implications for the Baltimore economy than nationally," Ryan Sweet, chief U.S. economist at Oxford Economics, wrote in a note.

  • Sweet says that transportation costs may rise, given the bridge is a key throughway for commercial trucks.
  • Still, the firm doesn't anticipate "that the increase in transportation costs and disruptions will be widespread or large enough to lift either headline or core consumer prices."

By the numbers: The port of Baltimore ranks 17th in the nation by tonnage of cargo handled, but it leads all other U.S. ports in imports and exports of cars and light trucks, according to state data.

  • Analysts at Cox Automotive say the impact on auto market sales "will be non-material as current new-vehicle inventory levels are healthy and alternative ports are in position to take up the slack."
  • In a statement to Axios, a spokesperson for General Motors said the company expects the situation to have "minimal impact" on its operations.
  • "We are working to re-route any vehicle shipments to other ports as the recovery work continues," the spokesperson said.
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