What impact will the collapse of the Baltimore Bridge have on the economy?

[New Sancai Compilation First Release] The tragic collapse of a bridge in Baltimore, Maryland, USA, after it was hit by a freighter on March 26, could affect car imports, coal shipments and transportation throughout the mid-Atlantic region of the United States, but analysts say the broader The economic impact should be limited.

The Francis Scott Key Bridge collapsed in the early hours of March 26 after being struck by a cargo ship chartered by Danish logistics provider Maersk (AMKBY) leaving the Port of Baltimore. After the incident, officials closed the port to ships and there was still a lot of debris in the water.

Car and coal transport may be affected

Maryland Governor Wes Moore said no other port in the U.S. imports more vehicles than Baltimore, with nearly 850,000 cars and light trucks imported by 2023, marking the 13th consecutive year the facility has opened at the facility. Leading the country in automobile imports.

The port also handles large quantities of coal. S&P Global International statistics show that in the second quarter of 2023, the Port of Baltimore ranked second in the United States in coal export volume, second only to the Port of Norfolk, Virginia.

The incident has damaged the interests of a major coal producer. Pennsylvania-based CONSOL Energy ( CEIX ) said vehicle entry into the port's marine terminal has been delayed due to the Coast Guard's security zone in the area.

Biden points to impact on jobs, transportation

President Biden said Baltimore's bridge is "critical to our economy and quality of life." He pointed out that the port provides about 15,000 jobs and more than 30,000 vehicles pass through the bridge every day.

"As I told Governor Moore, I have directed my team to do everything we can to reopen the ports and rebuild the bridges as quickly as possible," Biden told reporters.

JPMorgan analysts see little economic impact

Despite the disruption, JPMorgan analysts said the economic fallout should be modest.

"Our initial assessment is that the impact of this development on auto inflation is likely to be minimal," JPMorgan analysts Michael Feroli and Daniel Silver wrote.

"While Baltimore is the most important vehicle import port, more vehicles are imported overland from Canada and Mexico."

They point to Department of Transportation data showing the Port of Baltimore ranks 17th in the nation by total import weight.

Their note also said ships had been diverted to other ports, including the Port of Virginia, which said it had the capacity to handle the additional cargo. Analysts said it was also worth noting that areas where some car companies' terminals are located were not blocked due to the bridge collapse.

(Compiled by: Wang Jimin)

(Editor: Jiang Qiming)

(Source of the article: Compiled and published by New Sancai)