📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

GM, Ford will reroute Baltimore shipments after bridge collapse

Published 03/26/2024, 12:19 PM
Updated 03/26/2024, 07:00 PM
© Reuters. A view of the Dali cargo vessel which crashed into the Francis Scott Key Bridge causing it to collapse in Baltimore, Maryland, U.S., March 26, 2024.  REUTERS/Julia Nikhinson

By David Shepardson

NEW YORK (Reuters) -U.S. automakers General Motors (NYSE:GM) and Ford (NYSE:F) will reroute affected shipments after a bridge collapse in the U.S. shuttered the Port of Baltimore, but the companies said on Tuesday the impact will be minimal.

"We expect the situation to have minimal impact to our operations. We are working to re-route any vehicle shipments to other ports," GM said in a statement.

The Port of Baltimore is the busiest U.S. port for car shipments, handling at least 750,000 vehicles in 2023, according to data from the Maryland Port Administration. Motor vehicles and parts accounted for 42% of all Baltimore port imports.

Rescuers have pulled out two survivors, one of whom remains hospitalized, and were searching for more in the Patapsco River after huge spans of the 1.6-mile (2.57 km) Francis Scott Key Bridge crumpled into the water.

Ford Chief Financial Officer John Lawler said the bridge collapse, which happened after a container ship smashed into the four-lane bridge early on Tuesday, will force the automaker to divert parts to other ports and impact its supply chain.

"It's going to have an impact," Lawler told Bloomberg News. "We'll have to divert parts to other ports... It will probably lengthen the supply chain a bit."

Ford told Reuters in a separate statement "where workarounds are necessary in the short term, our team has already secured shipping alternatives."

U.S. Transportation Secretary Pete Buttigieg noted the large number of vehicles handled at the port and said officials were looking at significant impacts. "There is no question that this will be major and protracted impact to supply chains," Buttigieg said.

Stellantis (NYSE:STLA) said it is "initiating discussions with our various transportation providers on contingency plans to ensure an uninterrupted flow of vehicles to our customers."

Industry officials said it was too early to say what impact the accident will have on the auto sector.

"But there will certainly be a disruption," said John Bozzella, CEO of the auto trade group Alliance for Automotive Innovation. "Baltimore is the No. 1 automobile port in the U.S., and we’re in touch with federal officials to help them understand the scale of automotive operations there.”

Breakwave Advisors managing partner John Kartsonas, a shipping analyst and investor, said Baltimore is a significant port for imports of consumer goods, cars and other imports.

"There are a lot of other areas that can pick up the slack like the New York Harbor and all the way down to Savannah, Georgia," he said in an email. "It will take a while for the situation to resolve and to begin operating normally again, so definitely there will be delays in deliveries of goods."

Other transportation companies reported no major impact.

"While Baltimore is not a primary port for our North American operations, there will be some impact, primarily on vehicle exports," Toyota (NYSE:TM) said in a statement. "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.”

Volkswagen (ETR:VOWG_p) Group of America said it was not impacted because its Baltimore facility is located on the easterly sea board of the bridge collapse, while Nissan (OTC:NSANY) said it did not expect significant impact at this time.

BMW (ETR:BMWG) said the car docks are located on the ocean side of the harbor, so there was no major impact expected as the bridge collapse will not affect ships. It added that land-side truck traffic would be rerouted.

© Reuters. A view of the Dali cargo vessel which crashed into the Francis Scott Key Bridge causing it to collapse in Baltimore, Maryland, U.S., March 26, 2024.  REUTERS/Julia Nikhinson

Mercedes said the incident has had no impact on vehicle exports or the company's Tuscaloosa, Alabama, plant's parts supply, and it was monitoring the situation. It said it uses ports in Baltimore, as well as in Georgia and South Carolina, for vehicle imports.

Volvo (OTC:VLVLY) Group, which makes trucks, construction equipment and engines, said it was looking over its inventory in its U.S. production facilities to see if and when there could be a disturbance in worst-case scenarios, adding it currently expected no huge impact.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.