Baltimore bridge collapse is port's version of a global pandemic
The suspension of ship traffic at the Port of Baltimore following Tuesday's collapse of the Francis Scott Key Bridge is already taking a toll on businesses and workers in the region.
Theresa Abel, operations manager for Davis Ship Service, a logistics company that offers garbage removal, engine parts and other vessel support services, told CBS MoneyWatch that the business is entirely dependent on activities tied to the port. Normally a busy company with steady demand for its services, the phones have gone silent.
"It's almost scary how quiet it is. We have no emails, no phone calls," Abel said.
The 10-person company's warehouse stores parts for incoming ships, and she expects it to be empty by the end of the week as vessels divert to nearby ports and orders are halted.
Davis Ship Service is still servicing a handful of ships that were already docked at the port when the bridge collapsed. "They need stuff, they'll have to have their sewage pumped off while they are here, but it's very quiet," she said.
Michael Moss, owner of Moss Marine, another small business that performs technical repairs on ships at the port, said that "if ships don't come in, then my market is not there." He also said he could be tapped to help make repairs to the Dali, the ship that crashed into the Key Bridge.
"They will need to spend some money in the port before they leave to make it safe to travel. They're going to have to do something in my arena, whether I am the contractor or somebody else," he said. Otherwise he expects to be called to other nearby ports to service ships.
"It will cost more for them, because I have to travel. It's an inconvenience," Moss said.
Bigger disruption than COVID?
Every business at the port of Baltimore will be "severely challenged" by the bridge collapse, Maryland Senate President Bill Ferguson told CBS MoneyWatch.
Ferguson characterized the disaster as the port's version of a "global pandemic," comparing the potential upheaval to the impact on businesses and employment during COVID-19, which severely disrupted global supply chains.
The port's operations directly support 15,000 jobs and indirectly another 140,000 roles in hospitality and other industries, making it a major economic engine for the region. Port workers are employed by different businesses, including trucking companies, container repair businesses, tug boat operators and more.
The near-term economic outlook for such businesses is grim if they don't receive meaningful financial support fast, Ferguson said.
"The range of businesses and jobs that will be affected is so unbelievably diverse," he added. "There are companies that fix the hinges on cargo containers, we have bay pilots, longshoreman and dockworkers. At this point, all of them are affected."
Unlike some industries and businesses that shut down during the pandemic, Baltimore's port remained operational because international commerce continued. "The port still functioned and businesses related to it were deemed essential," Ferguson said. "But this shuts down international commerce for this region."
Layoffs expected
Ferguson said he's spoken to small business owners who say that, with business frozen for now, they expect to have to lay off workers in the coming weeks.
"We are trying to put together legislation for small businesses like them that are trying to find a way to keep their workers on and utilize them even though the port is shut down," he said.
The bridge collapse highlights the port's importance to the local economy, Ferguson added. "We take it for granted sometimes because it's always just there, and now it's not."
Cruise line operator Carnival told shareholders it could lose up to $10 million in earnings as a result of the collapse, while a workers union said thousands of its members could lose their jobs.
Scott Cowan, president of the International Longshoreman Association's Baltimore local, told WTOP news that 2,400 ILA members "are soon going to be without jobs."
To cushion the blow, Maryland lawmakers are drafting emergency legislation that would provide direct support to affected businesses. Providing incentives to port-related employers to encourage them to maintain a presence in Baltimore is another important component of the bill, Ferguson said.
While the bridge collapse will have an outsized impact on Maryland businesses, it won't have a significant effect on the broader U.S. economy, experts said.
"Nevertheless, since that port is the 15th largest in the country, handling only 1.5% of total nationwide container traffic, even an extended closure wouldn't have any impact on either GDP or inflation," Capital Economics chief North America economist Paul Ashworth said in a research note.
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