INTERVIEW: Not Shut Down by the Shutdown

By Reuvain Borchardt

Dr. Bradley Martin of the RAND Corporation discusses the Port of Baltimore shutdown following the collapse of the Francis Scott Key Bridge, and its impact on the supply chain.

Dr. Martin is the director of the RAND National Security Supply Chain Institute, and a senior policy researcher at RAND. He served 30 years in the U.S. Navy, including four command tours, retiring as a surface warfare captain.

In addition to his operational tours, Martin served on the staff of U.S. Forces Japan, the OPNAV staff as an operations analyst, and most recently as the Navy coordinator for participation in Joint Staff and OSD requirements and resources forums. His subspecialties included operations research, operational logistics, and strategic planning. 

He received a B.A. in political science from the University of New Mexico, and a Ph.D. in political science from the University of Michigan while working as a research assistant for the Correlates of War Project.

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How important is the Port of Baltimore to the supply chain of the U.S. and the world?

It’s very important to the economy of the United States.

The main thing that passes back and forth through the Port of Baltimore is vehicles. And that’s a big deal. A lot of vehicles that are exported or imported go through there. And that has a potentially big impact. Coal passes through Baltimore, so that affects energy exports.

In terms of volume for cars it’s number one. For overall volume, it’s up there among the top but it’s not necessarily the most important port the U.S. has.

In terms of the world, it’s key because there are goods coming to and from Europe going through Baltimore. 

This particular ship was carrying things including lithium batteries and corrosives.

So how do you expect this collapse to affect supply chains?

It’s going to significantly affect the Port of Baltimore and the people who work there. The port has something like 8,000 employees who are all being impacted to one degree or another.

In terms of how much it’s going to slow down production and delivery and so forth, it’s probably not going to have that big an impact. A lot of stuff will instead go to New York, New Jersey or Norfolk. So there are alternative port facilities that are picking up a lot of the slack.  

There will be delays. But I think overall, it’s going to be mostly a local impact. 

The supply chains work more effectively if they have the option of going through Baltimore. But if they have to go someplace else, they can.

While the shutdown will obviously disrupt the lives of workers at the Port of Baltimore and cause inconveniences to the companies involved, will it reach a level where there will be shortages and/or price hikes of some goods?

It seems very unlikely that it’s going to result in anything more than an inconvenience for companies that had specific things that were coming through Baltimore. For the most part, the system is going to react to this without a lot of disruption.

The stuff will go to New York, or Norfolk, or Wilmington. It’ll get to where it needs to go. And in some cases, manufacturers probably aren’t going to know the difference as far as delivery times. 

If you believe these ports near Baltimore can so easily pick up the slack, that would mean they have excess capacity?

That’s correct. They have enough capacity to handle what would have gone to Baltimore — at least at the moment. Whether they can sustain that over a period of months is a different issue.

Not too long ago there were lots of news articles about how the Ports of Los Angeles and Long Beach were having major backlogs. Why are there backlogs at those ports while the East Coast ports are operating with excess capacity?

It’s largely a difference in what’s being moved. 

The problem at West Coast ports like Long Beach was a shortage of crane operators and people and trucks to move the stuff off the piers. There was also an explosion of demand for consumer products largely coming from Asia. So we were seeing off the Port of Long Beach shipload after shipload of consumer goods.

That’s less of an issue on the East Coast.

The COVID pandemic caused major worldwide supply-chain disruptions. Has it recovered yet?

It’s still fragile, though it has definitely recovered to a large extent.

I think what everybody came to appreciate with the COVID disruptions is how fragile the chains were in many cases and how it didn’t take much to disrupt something in a major way.

There’s a lot more awareness of how stuff should move, and there are alternatives being thought through about other sources and so forth. 

I think one of the big things that was an issue with COVID was the impact it was having on China, which is a major exporter of manufactured goods, and big parts of the Chinese economy were shut down. That was probably the thing that was having the huge impact. That’s not completely recovered, but it’s largely recovered. 

I think it’s accurate to say that supply chains have gotten more robust since 2021. But it wouldn’t necessarily take all that much to create major disruptions in a couple of different places. 

The Port of Baltimore shutting down is a big deal, but adjustable. With Red Sea disruptions because of Houthi attacks on shipping, there are significant delays resulting from that, but it’s still more or less manageable. But the more that additional complications are added the more difficult things become.

The Maryland legislature is considering a bill to pay the affected dock workers. In your opinion, is that wise? 

One of the problems with almost all of our supply-chain issues is finding people to actually do the work. If the state of Maryland does not pay those individuals to stay on, they’re going to go find jobs someplace else. And then when the time does come to reopen the port, it’ll be more difficult to do it if those people aren’t available. 

This is an intelligent thing to do to preserve your workforce from what we believe to be something that’s going to be relatively temporary, as opposed to some permanent relocation where if a business is just not viable, you don’t pay to keep it alive; that would be a bad practice. But the Port of Baltimore is likely to be back, and trying to keep the workers around is probably a wise policy. 

They announced the opening of temporary shipping channels to try to help shipping traffic affected by the blockage of this channel. But while this channel was 50 feet deep, according to The Baltimore Sun, the first new temporary channel is only 11 feet deep, and the second one is 20 to 25 feet. How much of the usual shipping traffic will be able to go through these shallower channels?

The 11-foot channel is useful for tugboats pushing some critical stuff like jet fuel. With 20 feet you gain a little more flexibility in terms of barges and so forth. But that’s not going to allow you to bring the car carriers and the container ships, etc., back in. 

So these new channels won’t even bring the Port of Baltimore up to half its normal capacity. It’ll probably be something like 25%.

Any idea how long it might take to reopen the channel?

Nobody knows how long it’ll take until they can actually get down and do an assessment. But I estimate it’ll be the end of this year at the earliest.

The bridge took five years to build. How long do you think it might take to rebuild? 

I think five years is about right. It could be less; I don’t think it’s going to be more. The funding is there. 

Rebuilding the bridge will probably be at least three years. 

They probably know the hydrography of the river and everything pretty well. 

It just takes a while to go through the whole permitting and surveying. It’s not a simple process. I don’t think it’ll take five years, but three years is completely realistic. 

Once the channel is cleared, can shipping and construction go on at the same time, or does one interfere with the other?

It depends on what they’re doing with the construction, but generally yes, you can do both things at the same time.  

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rborchardt@hamodia.com

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This interview first appeared in Hamodia Prime magazine.