Stormy Waters Ahead For Maryland Businesses After Major Bridge Collapse

The catastrophic collapse of Baltimore’s Francis Scott Key Bridge on March 26, after it was hit by a cargo ship that lost power, has caused far reaching consequences for the people of Maryland and the state’s economy, as well as costing the lives of six bridge workers. 

The dramatic demise of the 1970s bridge has seen supply chains and traffic majorly interrupted, the port all but shut down, local businesses without their usual customers, and officials scrambling to pick up the pieces. Federal funds will be needed to rebuild, and Transportation Secretary Pete Buttigieg said that given that process won’t happen overnight, “we’re going to have to manage the impacts in the meantime. We’re working to mitigate some of those impacts.”

Over the past two weeks, engineers have been clearing the wreckage and said last week navigation in and out of the Port of Baltimore should be restored by the end of this month, Fortune reported. But despite that, the lengthy port closure is expected to cost up to $4 billion in insured losses, making it the most expensive ship collision for insurers in modern history, the Washington Post reports. 

The bridges reach

According to Baltimore Development Corporation President and CEO Colin Tarbert, there are around 20,000 local jobs tied directly to the port, NBC News reported, and there are nearly 140,000 additional jobs affected by the port’s activities.

While two alternative channels into the port have been opened since the collapse, with a third due to be open later this month, the main shipping channel still remains closed. That proves a major problem for the port, which ranks first in the country for the volume of automobiles and light trucks it handles, according to The New York Times, as well as for vessels that carry wheeled cargo, including farm and construction machinery. Terminals in Baltimore transported a record $80 billion worth of foreign cargo in 2023, totalling 52.3 million tons.

The bridge is a major connective component for the state’s wheeled traffic too, as part of a 10.9-mile stretch of the Baltimore Beltway, meaning there have been serious interruptions to traffic especially for trucks carrying hazardous materials that are not allowed in the area’s tunnels.

Wall Street Journal reports that JPMorgan economists told clients that while implications for vehicle inflation will be minimal, “indicators specific to the Port of Baltimore and nearby areas could be significantly impacted.” The collapse is akin to a natural disaster, short and sharp economic downturn, economists said. 

Impacts on industry

In 2023, the port was the ninth busiest in the country in terms of receiving foreign cargo, with some of its top materials going through it being vehicles, heavy farm and construction machinery, coal, coffee, and sugar. But the impacts don’t stop at just those industries. 

The domino effect of shortages and disruptions has rippled through other local sectors who are now missing out on materials, services, and, in some cases, customers - such as cruises in and out of Baltimore. The disruption doesn’t just mean declining revenue, but also spiked operational costs as supply chains are thrown into chaos. This leads to:

• Lost revenue: Retailers, manufacturers, and service providers are experiencing significant income drops.
• Increased expenses: Finding alternative transportation and accelerating shipping incur high costs.
• Spoilage and waste: Transport delays mean perishable items may spoil, impacting food-related businesses.
• Employee costs: Reduced business may necessitate cutting work hours or staff.

That’s where the extremely high insurance bill comes from - the expected $4 billion dollars that will be needed to help businesses and workers recoup the losses piling up. 

Help for local businesses

Baltimore Development Corporation President and CEO Colin Tarbert told NBC that while the bridge is closed, Baltimore is not — and local business owner Alex Del Sordo is proof of that. Del Sordo bought the 30-year-old waterfront restaurant Hard Yacht Cafe just 10 days before the collapse, and he told NBC he didn’t want to fire any of his 75 employees. “We want to keep them here — working, happy, healthy.”

On top of absorbing the shock and repercussions of the collapse, Hard Yacht Cafe has also been offering 50 percent discounts to first responders, so Del Sordo did admit there are some concerns about “stabilizing costs for our employment and keeping the lights on.”

The U.S. Small Business Administration is offering low-interest loans to local small businesses, the state is providing $60 million in relief funding, and the U.S. Department of Transportation has committed $60 million to support the rebuilding.

What can you do?

If your employment or business—be it retail, wholesale, or another sector—is intertwined with industries reliant on the bridge and port, or if these closures have disrupted your access to customers, you may want to consider exploring legal avenues to mitigate the impact on your operations and secure necessary compensation for your losses.

If your job or business wasn’t impacted by this disaster, it is still a good reminder of the vulnerability of supply chains and a chance to think about your emergency plan. In the meantime, it is always good to support local businesses and build up the buffer of community supply chains in case of major international or national disruptions.