Bloomberg: Economic repercussions after Francis Scott Key Bridge collapse

Baltimores Francis Scott Key Bridge collapse on Tuesday after a container ship slammed into it will have economic repercussions, as it caused the closure of the Port of Baltimore, as well as a major highway, Bloomberg said.Flexport CEO Ryan Petersen said importers will likely want to send their cargoes through West Coast ports and move them on trains eastward to avoid any bottlenecks at East Coast ports. Many were doing so already to avoid potential disruptions involving East Coast dockworkers in contract negotiations this year.Bloomberg noted that this would repeat the scenario that occurred during COVID-19 pandemic, as a sudden increase of 10 percent or 20 percent in shipment volumes at the port is enough to cause huge accumulation, congestion and waiting time for ships on the coasts."Baltimore isn’t a huge port for containers- about 3% of the total on the East and Gulf Coasts- but it handles the nations largest volume of automobiles, as well as a lot less-consumer-facing items like coal, gypsum and lumber. With total trade last year amounting to about $80 billion, every day Baltimore is closed is another $217 million thats not crossing its docks," Bloomberg said.Principal industry analyst at DAT Freight & Analytics Dean Croke also said that farmers gearing up for planting season may also feel the impact, as Baltimores proximity to the Midwests major farm and construction equipment manufacturers "has helped it become the leading US port for importing combines, tractors, hay balers, excavators, and backhoes."Head of research at logistics firm Freightos Judah Levine said, "we are omitting Baltimore on all our services for the foreseeable future, until it is deemed safe for passage through this area."Rerouting cargo to Philadelphia, Norfolk or the Port of New York/New Jersey could push up trucking and rail prices if the volumes are significant, and could cause some congestion at those alternative ports, said Levine, according to CNN.The US network noted that freight rates on transatlantic routes are roughly back at 2019 levels following a spike in shipping costs during the pandemic. But prices for trips heading from Asia to the US East Coast are more than double their March 2019 level because attacks on shipping in the Red Sea have forced vessels to divert around Africa rather than sailing through the Suez Canal.Despite potential for some increased cost of shipping, chief economist for Moodys Analytics Mark Zandi, said the disruptions arent likely to cause problems for the US economy as a whole since the goods are likely to find other ports.