Auto industry braces for ‘weeks of disruption’ after bridge collapse

The auto industry is bracing for supply chain disruptions as a result of the bridge collapse in Baltimore on Tuesday that shut down the busiest port for automobile shipments in the United States.

The Port of Baltimore indefinitely suspended shipping traffic after the collapse of the Francis Scott Key Bridge. Experts and industry officials said the impacts on the auto sector could be significant, leading to shipping delays and constrained availability — though not on the scale of those seen during the pandemic.

Ford and General Motors both said Tuesday they would need to divert shipments to other ports during the closure. John Bozzella, president and CEO of Alliance for Automotive Innovation, which represents most major automakers, said in a statement that “there will certainly be a disruption” to the industry, though it is too early to determine the precise impacts.

President Joe Biden said in remarks at the White House that federal officials would “move heaven and earth” to reopen the bridge and the port to minimize the economic impacts.

“Around 850,000 vehicles go through that port every single year, and we’re going to get it up and running again as soon as possible,” Biden said.

Details

The Port of Baltimore handled 847,158 cars and light trucks last year, making it the nation’s largest port for automobiles for the 13th year in a row, according to the state of Maryland.

Ford CFO John Lawler told Bloomberg News that the automaker would need to divert shipments to other ports “along the East Coast or elsewhere in the country.”

“We’ll work on the workarounds,” Lawler said. “It will probably lengthen the supply chain a bit.”

Ford spokesperson Lars Weborg added in a statement to POLITICO that “where workarounds are necessary, our team has already secured shipping alternatives.”

General Motors, meanwhile, expects “minimal impact to our operations,” spokesperson Jeannine Ginivan said in a statement. But the company is working to “re-route any vehicle shipments to other ports as recovery work continues.”

Toyota spokesperson Ed Hellwig said in a statement the company would feel “some impact, primarily on vehicle exports.”

“At this time, we do not anticipate a significant disruption, but we are evaluating the situation closely to determine the longer term impact and countermeasures,” Hellwig said.

Jaguar Land Rover said it is monitoring the situation, while Volkswagen, Volvo and Nissan also said the impacts would be minor. Volkswagen’s facility is located on the “sea board” side of the bridge, spokesperson Michael Lowder said in an email.

“We do not anticipate any impact on vessel operations but there may be trucking delays as traffic will be rerouted in the area,” Lowder said.

Volvo Group spokesperson Claes Eliasson said Baltimore is not a primary port for its commercial vehicle business, but it does have supply chain partners who operate there.

“It’s too early to say if this will lead to any disturbances, but we are monitoring the situation closely to see if we need to re-route any goods,” Eliasson said in an email.

Baltimore is also the top U.S. port for heavy farm and construction machinery.

Experts weigh impacts

Sina Golara, an assistant professor of supply chain and operations management at Georgia State University, said he expects “weeks of disruption” as automakers will need to shift not only their shipments, but also the land-based infrastructure required to receive it like warehousing and trucking.

“It would be a challenge to reschedule that much incoming flow to a different place,” Golara said. He expects companies will redirect imports to ports in New York and Georgia during the disruption, but they could still face constraints in the availability of certain models.

Golara noted that the automotive supply chain is more resilient than it was before the pandemic, and dealers have more inventory available, especially for electric vehicles. “Electric cars are in still better position than the average car,” he said.

Jason Miller, a professor of supply chain management at Michigan State University, said the impacts of the Baltimore closure wouldn’t rival those seen during the pandemic or the disruptions from a railroad strike. He said most vehicles sold in the U.S. have their final assembly in North America, except high-end European models.

“There may be some hiccups at the dealerships,” he said. “But for the average person buying a U.S.-made vehicle, there isn’t that much of a concern here.”

On the export side, some car factories could temporarily slow production as they wait for alternative shipping arrangements, Miller added. And the impact could be more significant in the agriculture sector.

“We’re just getting around right now for farming season,” Miller said. “Farmers who are buying imported equipment, as well as USA equipment exporters, are potentially looking at some major disruption.”

CORRECTION: An earlier version of this report misspelled Sina Golara's name.