After the Key Bridge collapse, will supply chain issues have an impact beyond Baltimore?

You’ve been listening live to uh us Transportation secretary Pete budajudge speaking at the White House in Washington actually just a little bit earlier not live there but uh just to recap a bit of what he was saying um about of course uh the event in Baltimore yesterday where that ship

Struck that bridge causing it to collapse he touched on the human impact the six people who did lose their lives and a seventh that was badly injured he mentioned he also was covering a lot of the economic impact there uh so talking about their priorities uh being

Reopening the port no timeline on that at this point though uh dealing with the supply chain implications by water because of the ships that are coming in and out of that Port uh rebuilding the bridge again no timeline there he did mention how the previous Bridge did Take

5 years to build but not saying that that would be the case in this uh particular instance um also talking about dealing with land transportation implications so all of the trucks that would be crossing over that bridge on a a day-to-day basis not being able to do

So so how are they being re-rooted from here he touched on the local economic impact as well saying that 8,000 jobs are tied to the port there so a big connection there locally uh it’s also an important port for imports and exports so a global reach there potentially

We’re going to dig into that in in just a couple of minutes here but just on the situation in terms of what we know about how the investigation is uh proceeding we know that investigators from the US national Transportation Transportation safety board rather they have recovered the blackbox data recorder so they’ll be

Mining that for information uh though the NTSB chair says that it is going to take some time that they could be on the scene for five to 10 days and as you heard there um as well in terms of the challenges of dealing with the clean up

And the parts of the bridge that have collapsed right on top of that ship how challenging that could be to be able to remove those parts of the bridge and and deal with the situation there and and all of the containers that remain on that ship at this time so still lots to

Cover on the scene there uh but but let’s zoom out a little bit and and take a look at how these supply chain disruptions could potentially have an impact Beyond Baltimore Maybe here in Canada for that I want to bring in Barry Prentice he’s a professor of Supply

Chain management at the University of Manitoba Barry thanks so much for making time for us my pleasure so uh when we hear supply chain issues it might take people back to the pandemic we heard a lot about uh supply chain disruptions at that time and we know that it helped

Fuel inflation so people could be on the edge of their seat here wondering could this have a similar impact or in some you know way could it have an impact on on prices down the road um how far do you think the disruptions from this

Could be felt um could we feel it here in Canada it’s not impossible that some shippers and carriers could feel it uh certainly we’ve integrated Supply chains with the US so that’s not impossible but I should remind people that I saw data that suggested that the freight from

That Port 2third of it is regional so Maryland Pennsylvania in Virginia I account for 2third of that Freight so there there is going to be a very significant local impact uh for them but towards Canada probably be restricted to maybe Ontario and Quebec I don’t think it’ll go beyond that uh but nonetheless

Uh you know these events remind us uh just how much we depend on trade and the resiliency of our system yeah it’s also interconnected isn’t it I mean especially when you think about uh the aut automotive supply chain and when you hear that the port in Baltimore is um

The busiest the the biggest in terms of a volume for uh light trucks and cars He also mentioned farming equipment would be in that category as well going through that Port how important it is for that um could there be an impact on that front when we’re thinking about how

Uh integrated Canada is with the US and Mexico as well when it comes to the automotive industry or would this potentially be more contained to perhaps imported finished product vehicles that are are just coming into the the US market well I saw a big Mercedes uh

Parking lot there in the on the map so that’s one of those yeah it’s mainly a finish cars coming in but if our parts and again because the systems are so integrated you only have to lose one small part to disrupt the supply chain that being said we should also bear in

Mind that the only problem for the port is the block entrance and how long it takes to remove that uh blockage from the shipping channel again you don’t have to remove the whole bridge to open the port so I think it will probably be open maybe faster than people think and

Of course we are into you know a jit or just in time sort of Supply chains but even with that companies do have inventory so they can withstand a week or so uh without finding you know shutdown uh but if it went on long enough well some companies maybe would

Be affected yeah we heard from a Buddha judge there saying that uh they’re working to mitigate the impacts with tools that didn’t exist years ago including a new freight office that’s coordinating the movements in in in of goods in ways um that didn’t you know pre pandemic have there been

Developments over the past couple of years to help smooth out disruptions like this in the supply chains well perhaps the biggest thing of course was the new Panama Canal which allowed more traffic to come in through the east coast of the US because bigger ships could get through the canal on the other

Side we have the problems in the Red Sea and so some ships that would have come through the Red Sea to Europe and then move products over to the east coast of the US and Canada uh they’re having to go a longer Route Around Africa so uh

There are other things out there besides just this one port that are affecting the supply chains so where are freight rates at this point you know could could a situation like this end up pushing up prices a bit so that you know maybe that is is felt beyond the you know uh the

Baltimore area or the more Regional area in terms of the the actual trade impact but maybe prices might get passed on a little bit further down the road well certainly regionally I think it would be an impact but beyond that I don’t think so the freight rates are back down to

Almost pre pandemic levels now and so this event and again putting it in perspective I think Baltimore mov about a million teus well Montreal moves more than that and Vancouver moves much more so it’s you know it’s in a sense of of a port it’s the ninth largest in the US

But it’s also moving other products so sugar and agricultural products cars as you mentioned oil uh coal so there’s there’s other things that are moved to the port so some of those Supply chains may be disrupted temporarily but again I would think that the removal of the

Bridge is going to happen much faster than people would expect teus 20ft equivalent units that’s used to yeah measure the the the volume of of containers um just very quickly Barry depending how much depends on how long this lasts this disruption lasts in terms of of the impact do you think if

If they’re able to clear up the the damage of the bridge sooner and they’re able to open the port what are we what are you looking at in terms of you know days weeks or or months in order to manage that impact well putting it in perspective of the modes of trans

There’s no impact on rail except picking things up at the Port uh the port itself has to have the entrance cleared and be back in again I’m thinking 10 days two weeks they they should be able to get that cleared up but we’ll see uh the biggest impact longer term of course

Will be the road system and it’s a congested area and of course that one Bridge apparently is the only way to move uh dangerous goods across the that area so they’re going to have to reroute those trucks quite a long way to do that so that of course you know how long does

It take to put a bridge back into action I think they said you know 5 years is a possibility well probably sooner than that now but nonetheless uh locally this is going to have some real serious impacts but I think they will be isolated to that area okay Barry really

Appreciate your your context on this that’s Barry prentis he’s a professor of Supply Chain management at the University of Manitoba

Some analysts have said that the bridge collapse outside the Port of Baltimore is likely to disrupt supply chain as both the bridge and the channel serve as a busy shipping corridor. Barry Prentice, a supply chain management professor at the University of Manitoba, says that there will be a significant local impact but delays will not be felt as much beyond Ontario or Quebec.

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