Baltimore bridge disaster impact on auto sales, supply chain expected to be minimal

The auto industry, following years of supply shortages, COVID-19-related disruptions, labor strife and natural disasters, quickly adapted this week to the Baltimore bridge disaster.

Analysts expect the accident to minimally impact shipping and U.S. vehicle sales. A 948-foot container ship smashed into the Francis Scott Key Bridge in Baltimore on Tuesday, presumably killing six people and suspending traffic in the busiest U.S. port for auto shipments until further notice.

The industry's pivot this week underscores the inherent resilience built into the global system of automotive logistics and supply chain organizations. Among the stress tests on the industry: Two years of microchip shortages, COVID-19 production challenges, labor shortages, the UAW strikes against the Detroit 3 last fall and the usual spate of natural disasters around the world.

The disruption to the Port of Baltimore, which handled more than 750,000 vehicles in 2022, is expected to have a minimal impact on the U.S auto industry, early analysis shows. While there are some expected minor disruptions in local deliveries, automakers are largely pivoting to alternative northeastern U.S. ports — alleviating shipping concerns, according to Cox Automotive.

"While Baltimore is the top port for auto shipments, this is not likely to cause or create a sudden new problem in vehicle supply that will materially impact the market," Jonathan Smoke, chief economist at Cox Automotive, said during the company's Q1 forecast call Thursday.

The port handles imports, exports and parts shipments for major automakers such as General Motors, Ford, Nissan, Toyota, Mazda, Subaru, Volvo, Jaguar Land Rover and the Volkswagen Group.

Immediately following the collapse, General Motors, Ford, Mercedes-Benz and Stellantis released statements saying they were working within their supply chains to reroute shipments to surrounding ports.

"Our conclusion is that the market is likely to be able to react" and not cause vehicle pricing issues or supply chain disruptions, Smoke said.

"But of course, the devil is always in the details, and I suspect if you're a dealer representing a European brand in the Northeast, that's where the most risk is likely to be from the vehicles that previously went through that port," he said.

Stabilizing inventory levels could prevent disruptions and delays related to the port closure, Mark Schirmer, communications director at Cox Automotive, told Automotive News.

"Dealers feel pretty strongly that their inventory levels are really good," he said. "So because the industry is so healthy right now, we don't expect any issues from Baltimore impacting overall cost."