How the Bridge Collapse in Baltimore Stands to Affect the Economy

The tragic collapse on Tuesday of a major bridge in Baltimore could affect automobile imports, coal shipments and transportation across the Mid-Atlantic region, though analysts said the broader economic effects should be limited.

The Francis Scott Key Bridge collapsed in the early-morning hours after it was struck by a cargo ship, chartered by Danish logistics provider Maersk (AMKBY), that was leaving the Port of Baltimore. Officials closed the port to ship traffic following the incident, which left six people unaccounted for and heavy debris in the water.

Car and Coal Shipments Could be Affected

No other port in the country brings in more vehicles than Baltimore, totaling nearly 850,000 cars and light trucks in 2023, the 13th-straight year that the facility has led the nation in auto imports, according to Maryland Governor Wes Moore.

The port also handles large volumes of coal. S&P Global International statistics show the Port of Baltimore had the second-highest coal exports in the country during the second quarter of 2023, behind only the port in Norfolk, Va.

The incident has already undercut one major coal producer. Pennsylvania-based CONSOL Energy (CEIX) said that vehicle access to its marine terminal at the port had been delayed due to the Coast Guard’s safety zone in the area. The company’s shares fell nearly 7% on Tuesday.

Biden Points to Impacts on Jobs and Traffic

President Joe Biden said that the bridge in Baltimore is “vital to our economy, and to our quality of life.” He noted that the port supports about 15,000 jobs and that over 30,000 vehicles go over the bridge each day.

“As I told Governor Moore, I’ve directed my team to move heaven and earth to reopen the port and rebuild the bridge as soon as humanly possible,” Biden told reporters.

JPMorgan Analysts See Muted Economic Fallout

Despite the disruption, analysts at JPMorgan said the economic consequences should be muted.

“Our initial assessment is that this development will likely only have minimal implications for vehicle inflation,” wrote JPMorgan analysts Michael Feroli and Daniel Silver. “While Baltimore is the most important port for vehicle imports, many more vehicles are imported over land from Canada and Mexico.”

They pointed to data from the Department of Transportation that showed when measured by total weight of imports, the Port of Baltimore ranks 17th in the nation.

Their note also said that vessels were already being diverted to other ports, including the Port of Virginia, which said it had the capacity to handle the extra loads. It’s also noteworthy that some auto company terminals are in areas not choked off by the bridge collapse, the analysts said.