Impact from the Baltimore Bridge collapse expected to be minimal after automakers shift deliveries and shipments to other ports to minimize disruptions.
Port of Baltimore
When a large container ship smashed into the Francis Scott Key Bridge and caused it to collapse into the Patapsco River last week, the disaster had the potential to cause major economic damage and heavily impact the automotive industry with the port being a hub for automotive-related shipping. However, a new report suggests that the impact will be minimal thanks to quick actions by some of the automakers that use the port.
Automakers shift shipments to new ports
A container ship similar to this one hit the Francis Scott Key Bridge.
A key part of this development is how quickly the automakers have adapted to the situation with General Motors, Mercedes-Benz, and Stellantis all revealing that they are currently working with their supply chain to reroute shipments of vehicles and components from the Port of Baltimore to other east coast ports in the region.
“While Baltimore is the top port for auto shipments, this is not likely to cause or create a sudden new problem in vehicle supply that will materially impact the market,” Jonathan Smoke, chief economist at Cox Automotive, said during the firm’s Q1 forecast call last week
Smoke elaborated further stating “Our conclusion is that the market is likely to be able to react” and not cause vehicle pricing issues or supply chain disruptions,” which could possibly indicate that the market could not only adapt to the challenges brought on by the disaster, but that it can also react quickly with solutions to facilitate a steady supply stream.
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Dealer Inventories Expected To Weather The Storm
Dealers also say that impact to their operations will be minimal.
In addition to the rapid movements by automakers to adapt to the logistical challenges brought on by the disaster, the impact on dealer inventories is also expected to be minimal.
“Stabilizing inventory levels could prevent disruptions and delays related to the port issue” said Mike Schrimer, communications director at Cox Automotive when asked by Automotive News on the subject. “Dealers feel pretty strongly that their inventory levels are really good, so because the industry is so healthy right now, we don’t expect any issues from Baltimore impacting cost.”
The lone exception could be minor disruptions for dealerships in the region that sell European automobiles. The Port of Baltimore is an important hub for European brands in particular with vehicles and components passing through the port regularly. Rerouting shipments to other ports might cause dealerships in that part of the country to wait longer for select vehicles to fill their inventory along with the components and parts that they might need for repairs and collision work.
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