DETROIT (WXYZ) — In the wake of the massive cargo ship crashing into the Francis Scott Key Bridge in Baltimore, Maryland, automakers were forced to react.
The port handled nearly 850,000 vehicles in 2023, more vehicles than any port in the U.S.
“Baltimore is one of the busiest ports of the country, and it is used quite extensively by the auto industry,” said Sam Abuelsamid, principal analyst with Guidehouse Insights.
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Abuelsamid says while the port mostly handles foreign vehicle imports, U.S. automakers do use the port to some extent for parts. Those automakers say they have been working to re-route those shipments.
“Anytime you have to make changes like that, there's almost certainly some costs associated with it, but I think the bigger challenge is just the logistics,” Abuelsamid said.
Amy Broglin-Peterson, a faculty member with MSU’s Supply Chain Management program, says that challenge is based in capacity.
“It's not always as simple as saying I want to switch my volume now to this routing," Broglin-Peterson said. "There has to be capacity available. And if there is capacity and everyone is in a similar situation — so they're all trying to obtain that capacity — then the rates absolutely will jump."
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Sam Fiorani with AutoForecast Solutions also notes the negative impacts will be felt more so by foreign automakers rather than the Detroit-based Big 3, which don’t rely as much on foreign shipping.
“This is a shock to the system and we'll see how quickly they can get this port reopened,” Fiorani said. “Most of the vehicles that are built by the Detroit 3 especially are largely sourced by North American parts. U.S., Canada, Mexico.”
Ford Motor Co. told us they’ve already secured shipping alternatives where necessary. General Motors sent a statement that says:
"Our thoughts are with those who were affected and the Baltimore community. We expect the situation to have minimal impact to our operations. We are working to re-route any vehicle shipments to other ports."
Stellantis also sent a statement saying:
"This is a horrific tragedy and we will keep all those involved, including first responders, in our thoughts. The Port of Baltimore is an important waterway for the automotive industry. We are initiating discussions with our various transportation providers on contingency plans to ensure an uninterrupted flow of vehicles to our customers and will continue to carefully monitor this situation."
"I think this is just one more unfortunate incident which points to the necessity of evaluating your supply chain for risk and companies having contingency plans and alternatives in place that they can pivot to when needed,” Broglin-Peterson said.
During an interview with Bloomberg Tuesday morning, Ford’s CFO John Lawler said since the COVID-19 pandemic, they’ve learned a lot about managing supply chain disruption and will use that experience when navigating this disaster.
