Detroit Regional Chamber > Automotive & Mobility > MICHauto Perspective: Automotive Industry Impact of Francis Scott Key Bridge Collapse

MICHauto Perspective: Automotive Industry Impact of Francis Scott Key Bridge Collapse

March 27, 2024

Earlier this week, the Francis Scott Key Bridge in Baltimore collapsed after being struck by a container ship. The port where the bridge is located is the number one automotive port in the U.S. Its vehicle terminals, such as Dundalk and Fairfield, facilitated the movement of over 750,000 vehicles in 2022, with imports totaling 573,831 and exports reaching 176,332, a combined volume of 750,163. In 2023, motor vehicles and parts constituted 42% of all port imports (approximately $25 billion), 27% of all port exports (approximately $6 billion), and 38% of the total port trade (approximately $30.6 billion).

MICHauto Perspective

MICHauto has been in close contact with several OEMs and major automotive stakeholders as it continues to monitor the aftermath of this critical bridge’s collapse and assess the implications for the industry and its domestic supply chains. Fortunately, many companies indicate they have been able to quickly reroute products to other ports. Hard-learned lessons from the pandemic that placed greater industry attention on supply chain management data and logistical management helped inform this swift action. More long-term implications are still largely unknown.

What OEMs Are Saying

Major OEMs are still assessing the situation. On Tuesday, Ford, General Motors, and Toyota indicated that they are currently working to identify alternative ports where parts can be diverted. Ford’s Chief Financial Officer John Lawler shared with Crain’s Detroit Business how supply chain disruptions over the last few years related to the COVID-19 pandemic have prepared the automotive industry for this moment, saying, “We have experience now in understanding supply chain disruptions. So, we’ll just put that experience to work and figure out the best solution.” Meanwhile, General Motors expressed confidence that the port’s closure would have “minimal impact” on their operations. Similarly, Toyota stated that, at least in the short term, the company did not anticipate “significant disruption.”

It is important to note that these are initial assessments and that many unknowns remain regarding the long-term impact. Specifically, OEMs are still working to better understand what parts and components may be affected across various tiers of the supply chain.  It will take companies some time to establish clear lines of sight on these at the supplier and sub-supplier level and therefore determine the extent of the disruption due to the port’s closure.

Federal Response

In remarks at the White House on Tuesday, President Biden called for the swift reconstruction of the bridge. He vowed that federal officials would “move heaven and earth” to reopen the port and advocated for the federal government to do so by paying the entire cost of reconstruction. However, with Congress on a two-week break, it is unclear how fast new funds could be appropriated or whether existing Department of Transportation funds can be deployed immediately to cover the cost of reconstruction.

MICHauto will continue to monitor the situation and keep investors and industry leaders informed of its impact.