Port of Baltimore businesses pivot after Key Bridge collapse: ‘We’re already making alternative plans’

Soon after the container ship Dali struck and toppled the Francis Scott Key Bridge early Tuesday, Paul Brashier was among many in the shipping industry who shifted into overdrive.

From Texas, Brashier turned his attention to the cargo — tires, dog food, home goods, cookware — packed into containers on ships headed to the Port of Baltimore and handled by his logistics company. At 3 a.m., after hearing about what ended up being a deadly collision, he rushed to wake up some clients and put contingency plans in place.

“Our largest concern once we saw that that bridge cut off the harbor for vessel traffic for containerized cargo, we started looking at possible diversion ports and what was going to happen to the freight and start working with clients,” said Brashier, a vice president at the Reno, Nevada-based ITS Logistics.

“That was the triage, and we’re going to be doing that here probably for the next five to seven days,” said Brashier, whose firm transports freight from ocean ports to distribution centers or stores in 56 markets, including Baltimore, one of its largest. The company also handles domestic trucking and brings cargo to ports for export.

With remains of the span that connects Interstate 695 blocking the only channel in and out of the port and vessel traffic suspended, operations have been disrupted or forever altered for the many businesses and workers who move goods and vehicles through the port and beyond. Many companies like ITS are scrambling to reroute cargo to places like Norfolk, Virginia; Savannah, Georgia; Charleston, South Carolina; New York and New Jersey.

On Wednesday, authorities continued collecting evidence and searching for six missing construction workers in the Patapsco River, while experts predicted a bridge rebuild could take as little as two years or as many as 15. And the National Transportation Safety Board said it is analyzing the ship’s onboard data.

Brashier, whose clients are retailers, manufacturers and the auto industry, said Wednesday the company has leaned heavily on its “visibility” technology, which allows clients to see almost in real time the location of their freight before it arrives in the U.S.

“It’s a great big focus right now as we’re waiting to see where all these containers that were going to go to Baltimore end up getting discharged on the East Coast,” he said.

By later Tuesday, the company had begun planning for its next phase of operations — the ability to reach normal container flow in the next two weeks — at ports that are new to clients. By early next week, the company expects to start longer-term planning, making decisions such as potentially moving some business to the West Coast.

Brashier said his company has infrastructure to handle customers whose freight is rerouted. But it may be more difficult for the shippers.

“If you’re used to bringing in all your freight into Baltimore and that goes to a local facility, now you’ve got freight that’s going to be hundreds or thousands of miles away from that original entry point, which means you’re going to have additional transportation costs,” he said.

Shippers also could be charged fees that are sometimes assessed for not removing containers quickly enough from a port. And they could face increased trucking costs to transport goods to end users.

“You’re going to see inflationary pressure to the end user, the consumer, just like we did post-Covid, probably not that bad, but there will be additional transportation costs,” Brashier said.  “We’re trying to insulate our clients as much as possible from additional charges and be a good steward. The hope is other folks, the ocean carriers and terminals, would do the same.”

Baltimore’s port, a major hub for importing and exporting cars, light trucks and bulk goods, will likely face a shutdown for at least three months, some in the industry believe. If supply chains begin to leave Baltimore out, the effects could linger many months longer, experts believe.

Another logistics company, C.H. Robinson, which handles shipping by ocean, air, truck and rail, said Wednesday it’s been making plans for containers on ships rerouted to places such as New York, New Jersey or Norfolk, Virginia.

“We’re already making alternative plans to pick up those containers and arrange for truck or rail transportation from the new ports,”  C. Matt Castle, vice president of global forwarding, said in an email. “For shipments that haven’t departed yet, we’re helping customers retrieve those containers from the Port of Baltimore and get them on their way.”

But with the Key Bridge gone, trucks will face delays, especially those traveling from the south and using I-95 or I-895 tunnels or navigating around the harbor, a detour that could add an hour to trips, he said.

“The good news for customers with containers that had already arrived at the port is that we can get drivers in to access their freight,” Castle said. And, though rail service to the port from places such as Chicago has been suspended, it’s likely to start up again this week, enabling cargo loaded onto trains to move inland.

Tinglong Dai, a professor at Johns Hopkins Carey Business School in the area of Operations Management and Business Analytics, said during a Wednesday panel at Hopkins that the shutdown will hurt Baltimore in the short run but is not expected to have a big impact on the global supply chain, which has become flexible and resilient.

Even at the port, the impact will vary, he said. Though the port plays a major role in automobile imports and exports, not all automakers at the port are impacted. BMW and Volkswagen each having terminals outside the area of the bridge collapse. But companies such as General Motors or Ford are affected.

“The impact is relatively local. It’s definitely not a national supply-chain crisis and won’t trigger a global supply-chain crisis. I don’t want to downplay the impact, but resilience has been built into global supply chains,” Tinglong Dai said.

Natalie M. Scala, an associate professor at Towson University who directs the graduate program in supply chain management, raised concerns about ships stuck at the port with no way to distribute products.

“The immediate impacts, in terms of a supply change component: it’s the port being clear and open,” Scala said. “The bridge, obviously, is important. But the economic impact in Baltimore and this region and the eastern seaboard is the actual product in and out of the port itself.”

Sun reporters Maya Lora and Jonathan PItts contributed to this story.