Auto Industry Expects Minimal Disruption From Port Shutdown
Baltimore is a top destination for car shipments, but companies are finding ways to use other ports on the East Coast. The Port of Baltimore handled more than 750,000 cars and trucks in 2023.Credit…Jim Lo Scalzo/EPA, via Shutterstock March 28, 2024, 3:30 p.m. ET Concerns about the impact of the Baltimore bridge collapse on auto […]
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Baltimore is a top destination for car shipments, but companies are finding ways to use other ports on the East Coast.
Concerns about the impact of the Baltimore bridge collapse on auto imports and exports are beginning to ease as car companies turn to other ports along the East Coast.
On Thursday, Cox Automotive, a market researcher, said it expected the situation in Baltimore to have no material impact on vehicle sales in the United States.
“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, Cox’s chief economist, said in a conference call. “The port is heavy for exports and imports, but there are alternatives.”
Mercedes-Benz said it has already found other ways of handling the vehicles it usually imports from Germany through Baltimore.
“Together with our transport partners, we reviewed and successfully adapted our supply routes,” the company said in a statement. “We are confident that our cars can be distributed on time for customers in the U.S. in April.”
The company added that it already uses the ports in Charleston, S.C., and Brunswick, Ga., in addition to Baltimore. Mercedes also said exports of vehicles it makes in Tuscaloosa, Ala., and shipments of parts for that factory were unaffected.
Most vehicles sold in the United States are assembled in North America. Even for European automakers that have relied on the Port of Baltimore, the impact is likely to be muted because many of their most popular models are made here.
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BMW, for example, makes its sport-utility vehicles in South Carolina. It imports sedans and sports cars from Germany, but they sell in smaller numbers than S.U.V.s. Two exceptions are the BMW 3 and 4 Series sedans. But the auto maker should have enough inventory on dealer lots to keep sales going for some time.
At the end of March, BMW had enough vehicles on dealer lots to last nearly 70 days at the current rate of sales, which is slightly below the industry average, according to Cox Automotive.
In addition, part of the Port of Baltimore’s automotive operations has not been shut down by the bridge collapse. The Tradepoint Atlantic terminal, which is used by Volkswagen, is at the mouth of the harbor, east of the Francis Scott Key Bridge, and still accessible to oceangoing vessels.
Automobiles are transported in vessels known as roll-on, roll-off ships. These ships require specialized port and dock facilities. Imported vehicles also must be processed in the port before they can be sent to dealers. Sometimes additional equipment is installed in cars before they are loaded onto trucks or trains.
The Port of Brunswick in Georgia already handles hundreds of thousands of cars, trucks and other vehicles per year. Its automotive facility, the Colonel’s Island Terminal, covers more than 600 acres, and has more than 400 acres available for expansion. Ports in Charleston, Jacksonville, Fla., Newark and Norfolk, Va., can also handle roll-on, roll-off ships.
