The shipping lanes are clogged with debris, leaving people and businesses that depend on the ports for a living at a loss. There will soon be no more cargo on the pier, and it won't arrive any time soon. Logistics companies, shipping companies and retailers are bracing for potentially large economic losses from prolonged disruption of port operations.
“We believe it will take six months. That's what we're telling shippers,” said Rich Kane, owner of the trucking, warehousing and freight brokerage firm serving the port, part of the Kane Group. said Mr. (54).
Even if it doesn't take that long, cleaning up sunken ships and abandoned bridges isn't quick and easy. The suspension of cargo could be the biggest blow to Baltimore's maritime prosperity since the city emerged as a commercial gateway with the tobacco trade in the 1600s.
For the U.S. as a whole, port closures will have “no material impact” on economic growth or inflation, according to Capital Economics. But this is a disaster for the local economy and for hopes of increasing blue-collar jobs. Some freight executives likened the situation to other mega-disasters.
“For me, it's things like COVID and 9/11, those two events that basically stopped us in our tracks,” said John Schmidt, chief operating officer of Cain's Capitol Express division. said. “The longer this goes on, the worse it will get.”
A marine crane capable of lifting 1,000 tons will arrive in Baltimore on Friday, the first step toward clearing the tangle of ships and bridges blocking the Patapsco River, which connects the port to the Chesapeake Bay.
Working on and in water is expected to be dangerous and time consuming. After the debris is cleared, a multi-year project to build a new bridge will begin. Transport experts say cargo ships will be able to call at the port while reconstruction progresses.
“Once that channel is open, we are confident that the port will be able to handle all the operations that it has handled in the past,” said Jim White, who retired in 2019 after 18 years as the port’s executive director. he said. “The problem at the moment is that no one knows how long the channel will be shut down.”
Reopening cannot be done too soon. With no cargo ships arriving for the foreseeable future, port activity is beginning to decline.
The number of trucks calling at Sea Girt Marine Terminal, one of the port's five cargo handling centers, decreased each weekday last week. The number of truck transactions recorded through Thursday was 2,889, down almost 20% from Monday, according to the facility's website.
A diversified business like Kane Group, with multiple revenue streams, is well-positioned to weather what lies ahead. Smaller trucking companies, known as “drayage,'' which only transport cargo short distances to ports, will be hit as hard as startups.
Arness Harrison, 41, and three partners spent 18 months researching the market and raising $300,000 before launching HHAL Logistics last summer. One of the few minority-owned companies in the trucking industry, it was struggling to turn a profit before the bridge collapse.
“This could be catastrophic for us. I'm very worried, very worried,” he said.
Harrison grew up in a blue-collar family in Baltimore. He spent several years bouncing between pre-law and pre-medical studies before taking up teaching at Anne's Arundel County. He then took a job with the Postal Consolidation Company and is still active today, building new businesses.
HHAL Logistics is his chance to be his own boss and make money. He has no intention of quitting.
“Up until now, we knew we had to diversify to survive,” he said, leaning on a lime-green forklift. “You have to move a little faster to stay afloat.”
Reminders of Baltimore's faded industrial prowess dot the area around the harbor. The General Motors plant, which employed thousands of workers within sight of the ocean, closed in 2005. Sparrows Point, less than 10 miles away, was the site of the former Bethlehem Steel facility.
Baltimore's logistics cluster has been under pressure in recent years. Maryland has lost about 3,100 jobs since 2019, even though national employment in the trade and transportation sector has increased by nearly 5%.
The bridge collapse came as the port was on the verge of a record year for cargo handling while awaiting infrastructure improvements that are expected to improve the port's competitiveness.
Instead of building on its success, the port is now largely frozen. Freight forwarding companies like Maersk and Evergreen have begun diverting container ships to ports in New York, New Jersey and Norfolk. In most cases, the company that owns the goods pays to transport the goods from the new destination port to Baltimore by truck or rail.
On Wednesday, Cain held a Zoom call with 10 of the largest shippers and agreed to pay a one-time fee to cover the additional cost of rerouting their goods. Given all the uncertainty, it will likely be several weeks before we know how much to charge.
Mr. Kane, whose family has been in the shipping business since 1918, said one customer ordered five times the normal amount of goods because he feared he would run out of supplies due to congestion at other ports. Told.
“They're building up inventory. At this point, shippers don't know what's going to happen,” he said.
Similar to airlines, ocean carriers provide scheduled services to specific destinations. If those schedules change and shippers become accustomed to shipping goods through other ports, Baltimore may struggle to regain lost business.
Contracts to handle cargo coming from or destined for Baltimore-area customers will return as soon as the port reopens.
But according to former Maryland Secretary of Transportation John D. Porcari, more than half of the goods that arrive in Baltimore in a typical year are destined for far-flung destinations such as Chicago. That “discretionary” cargo could easily flow into other East Coast gateways, especially if the price is right.
“What ports do best is steal discretionary cargo,” said Porcari, who served as President Biden’s special port envoy during the pandemic supply chain crisis. “Long term, Baltimore could lose some of its discretionary cargo, and that would hurt.”
Craig McGraw worries that the contract he was hoping to receive from a Houston power company could be one of those jobs that goes in a different direction.
Mr. McGraw, 42, vice president of sales and marketing for Trans American Truck Service, which specializes in industrial parts handling, recently bid on a job trucking the Houston company's equipment from Baltimore to Ohio. did. These parts will be used in Intel's $20 billion semiconductor factory being built northeast of Columbus. That work was scheduled to begin in August. The fate of the contract is currently unknown.
McGraw's father, Ron, now 83, started the business in 1976 with a single flatbed trailer. Trans American, headquartered in South Plainfield, New Jersey, currently has about 50 drivers, evenly split between staff and owner-operators, handling cargo from the Port of Baltimore.
McGraw expects revenue to decline starting next month, but there are no plans to cut employees. He said that during the 2008 financial crisis, everyone, including executives, took significant pay cuts.
“We're proud that we've never laid anyone off,” he said.
Still, one customer decided to ship coiled electrical cable through the Port of Newark while Baltimore was idle. And others will surely follow suit.
“If they get comfortable, could it ever come back to Baltimore?” he said.
After more than four centuries as a trading center, Baltimore has reason for optimism.
The port is one of four on the East Coast with the 50-foot-deep channel needed to accommodate New Panamax-class vessels carrying more than 10,000 shipping containers.
Due to its location on the Patapsco River at the top of the Chesapeake Bay, Baltimore is further inland than other competing ports and closer to major transportation hubs in the Midwest such as Chicago. Baltimore has less traffic congestion than alternative cities like New York-New Jersey.
A major expansion of the city's Howard Street Tunnel, scheduled to open in 2027 to accommodate freight trains carrying double-stacked shipping containers, will also make Baltimore a more attractive freight transit route. Dew. State officials expect the project to create 7,300 permanent jobs.
Many may become regular customers at Vinny's Cafe, about a mile from the port. The family-owned restaurant has been doing successful business with the port for 25 years, including catering events. Last week, the effects of the bridge accident were evident in the sparse attendance at walk-in lunches.
When asked about the impact of the long-term closure, owner Vinnie Scott, 65, frowned. “It's like clogging the artery to your heart, and it's not pretty,” he says. “It’s not going to be good for this side of town.”
Fabrizio, whose son runs the café, says he sympathizes with the longshoremen, but is confident the restaurant will survive any difficult times. Scott's recently opened his renovated dining room, complete with a sparkling horseshoe-shaped bar, and is attracting evening business.
“This is heartbreaking,” Binney said. “I used to live across the street. I see the bridge every day.”
