Following the incident of the container ship crashing into the Francis Scott Key Bridge at the Port of Baltimore and the bridge collapsing, there are now some supply chain concerns. While they may not be felt right away by consumers, there are a number of businesses that will be affected by it.
, PhD, professor in 黑料正能量's and an expert on operations and supply chain management, said one immediate impact is where container ships will be diverted to for offloading.
The Port of Baltimore is a major shipping hub and ranks first among U.S. ports for autos and light trucks. Now those ships will have to find other ports to unload their goods, which becomes a logistical problem as much as anything.
鈥淢ost ports on the East Coast are at 70% to 80% capacity, which is where you want to be. You don鈥檛 want to have much more than that, but they鈥檙e going to have to,鈥 said Franza. 鈥淚t could affect a good bit of the eastern half of the United States.鈥
Ports in Savannah, Charleston and New York, among others, will have to become the destination for those currently sitting outside Baltimore and those en route from around the world.
The good news, Franza said, is that most foreign car manufacturers have plants in the United States so it will likely only affect those consumers looking for a certain brand or even a specific model.
Baltimore is also one of the furthest inland ports and has the best rail service coming from it. The outbound goods coming off the ships will now face more of a transportation hurdle when they are diverted to another port.
鈥淚t鈥檚 not just the capacity of the port, that鈥檚 one thing, but it鈥檚 also their capacity of the聽outbound items,鈥 he said. 鈥淚t may be more trucks are needed, and new routes are needed to move inventory. It now becomes a whole different set of providers for the trucks because it鈥檚 no longer the people in Baltimore.鈥
Franza added companies will also have to decide which distribution centers they may want to use, whether it鈥檚 closer to the area they serve or closer to the port. All those factors affect where the items from overseas end up.
While it鈥檚 not a good scenario, at the end of the day, he feels the consumer likely won鈥檛 see much of an impact.
聽鈥淔irst of all it鈥檚 going to take a while before we see any effect on certain things,鈥 Franza said. 鈥淭he bad news for inflation is that it鈥檚 going to raise the cost of transportation for the goods coming off the ships. Will businesses absorb the cost or pass them along to consumers?鈥
Looking to know more? Then let us help.
, PhD, is available to speak with media about trending issues like inflation, small business and the economy 鈥 simply click on his icon now to arrange an interview today.
Richard Franza, PhD
Faculty, James M. Hull College of Business
Dr. Richard M. Franza is a professor and former dean of the James M. Hull College of Business.