The race to reroute goods from Baltimore continues
Closures force firms to remake supply chains
New John Deere tractors made their way last week through the sprawling port of Brunswick, Georgia, their distinctive green paint glinting in the sunshine. Stevedores drove the tractors up a ramp into the belly of the Leo Spirit, a ship that would take them to Asia.
As orderly as everything looked, the tractor convoy was an example of the enormous lengths to which East Coast ports, railways, truckers and shipping lines have gone to remake supply chains after a container ship crashed into the Francis Scott Key Bridge in Baltimore last month. The bridge's collapse closed most of the Port of Baltimore,
which last year handled 1.3 million tons of farm and construction machinery and 850,000 cars and light trucks.
The Deere tractors would normally be shipped from Baltimore, getting there on trains from a factory in Waterloo, Iowa, according to Georgia port officials. Instead,
the tractors had to be trucked to Brunswick, a journey that adds time and costs.
“If we didn't have Brunswick, I think the supply chain would be in a bad way on the auto side,” said Griff Lynch, CEO of the Georgia Ports Authority, who has overseen an ambitious expansion of Brunswick. But he said some areas at the port were now getting congested and acknowledged there was no way Brunswick could handle all of Baltimore's vehicles — in April, the port expects to take around 17,000 more than the 70,000 it normally handles in a month.
Such frenetic workarounds to deal with Baltimore's closing are happening up and down the East Coast, for vehicles, shipping containers and coal.
But not all the adjustments are going well. The trucking industry is under immense stress with executives saying they are struggling to get drivers and loads to where they are needed on time and without losing money.
Akram Ayyad, owner of 410 Transport, a Maryland trucking company, said that his costs had shot up because he now had to transport cargo farther, to the
Port of New York and New Jersey instead of Baltimore, and that his customers were balking at having to pay more.
“We're dying here,” he said.
The almost total closing of the Baltimore port is also hurting shipping lines, which have had a rough year. They were already rerouting vessels to avoid the Red Sea, where the Houthi militias of Yemen are attacking cargo ships, and dealing with delays at the Panama Canal, which has reduced passages because of low water levels.
The Baltimore disruption is an unnerving reminder of the extreme supply chain snarls of 2021 and 2022 that caused shipping costs to soar and helped stoke inflation, which remains elevated.
To help alleviate the impact of the Key Bridge's collapse, the Biden administration is turning to a special supply chain disruption
task force it set up in 2021. “That helped with easing frictions very, very quickly,” said Lael Brainard, director of the National Economic Council.
Port officials say they can absorb Baltimore's goods for now in large part because the supply chain is not under as much pressure as it was two to three years ago, when there was a deluge of imports during the pandemic.
The Port of New York and New Jersey is handling about two-thirds of Baltimore's container business and one-third of its auto cargo, said Beth Rooney, a director of the Port Authority there. She learned around 3 a.m. on March 26 that the Key Bridge had been struck and quickly reached out to her counterpart in Maryland to offer help.
“My immediate thought, due to our proximity to Baltimore, was that we were going to wind up receiving a lot of their cargo,” Rooney said.
Rick Cotton, executive director of the Port Authority of New York and
New Jersey, said that, even with the goods from Baltimore, the port's container traffic was around 20% below levels reached in the pandemic rush.
But port officials said operations could begin to show signs of strain if the Baltimore port did not reopen by the end of May, when the U.S. Army Corps of Engineers expects to restore normal traffic to the port. The main problem will be in transporting goods out of the port to their destinations.
“As each of these additional shocks comes along,” Cotton said, “this puts extraordinary stress on the system.”
Smaller car transporters, which have struggled in recent years because car sales have been hurt by the pandemic, a chip shortage and strikes, have not been able invest sufficiently in their fleets, said Sarah Riggs Amico, executive chair of Jack Cooper Transport, an auto carrier. “The supply chain right now is relatively imperiled in auto,” she said