Will Baltimore bridge blockage trigger a new supply chain crisis or higher prices?

WASHINGTON — The catastrophic bridge collapse that closed the Port of Baltimore to ship traffic is unlikely to trigger a major new U.S. supply chain crisis or spike goods prices, due to ample and growing spare capacity at competing East Coast ports, economists and logistics experts say.

"We're ready to help. We have ample capacity to absorb any surge in container traffic," Port of Virginia spokesperson Joe Harris told Reuters. East Coast ports have invested billions of dollars over the past decade to expand capacity and while the temporary closure at Baltimore may add time and cost for some companies, economists do not expect a significant macroeconomic impact.

No ships, no work The impact on the Port of Baltimore's more than 2,000 workers who load and unload cargo vessels could be significant if the closure lasts more than a few days. The port directly generates over 15,000 jobs, with an additional 140,000 jobs dependent on port activity, according to Maryland Governor Wes Moore's office.

The risk of car price spikes is further dampened by a recovery in automotive inventories to their highest level since May 2020, after being drawn down sharply during the pandemic. The industry's inventory-to-sales ratio is near its 32-year-average of 1.96 to 1 according to Census Bureau data, and sales incentives have risen in recent months as high interest rates dampen demand.

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