The 2:00 Minute Warning

On Tuesday morning, news broke that the Francis Scott Key Bridge had collapsed overnight after being hit by a cargo vessel leaving the Port of Baltimore.

Unfortunately, there were construction workers on the bridge at the time of the collapse and efforts have transitioned from rescue to recovery. Our thoughts and prayers are with those who have been affected by this tragedy.

Since the incident, I have been receiving calls from journalists and others who are interested in learning how this will impact supply chains, so here is a synopsis of key points I have been sharing:

1. This incident has resulted in the closure of the maritime operations at the Port of Baltimore indefinitely – over seventy vessels inbound and currently in port are affected. Trucks are still permitted to move through the facility, but vessel traffic is suspended until the channels are cleared.

2. The freight intended for the Port of Baltimore will be moving to other ports on the Eastern Seaboard. There has been excess capacity at other ports in the region, so no issues are expected with absorbing this freight, but it will mean longer transit times and added costs for many shipments.

3. Since Baltimore is closer to the Midwest than any other East Coast Port and just an overnight drive to one-third of the country’s population, there will be downstream impacts on trucking capacity and rates. Containers moving through Baltimore might have been planned and quoted as a 50–100-mile drayage. Now with diversion to a more distant port, delivery mileage may double or triple, take significantly longer, and be substantially more expensive.

Beyond sharing these facts with you, we want to go beyond simply telling you what happened and predicting how this event could impact supply chains. And that is why if you're looking for guidance on how to deal with disruptions at the Port of Baltimore, I encourage you to send me an email, and I'll share an insightful one-page resource we've developed for your review. In our “10 Actions for Shippers in Response to the Baltimore Francis Scott Key Bridge Collapse” we have identified steps shippers should take right now to protect their supply chains.

Before signing off, I must address something that is exceedingly important. Now more than ever your company needs a supply chain contingency plan! Creating a supply chain contingency plan can be an important first step in a risk assessment outlining the vulnerabilities in your company's supply chain and their related costs.

Think about this: in the last nine months alone, supply chains have been disrupted by the closure of Yellow, the conflict in the Red Sea, the water level in the Panama Canal, and now the incident at the Port of Baltimore. And when you add the possibility of natural disasters, geopolitical events, transportation issues, supplier issues and bankruptcies, a solid supply chain contingency plan can help protect your company's operations, financial performance, and reputation.

If you are still not convinced about the need for a contingency plan, here are your choices. You can either have a written supply chain contingency plans which asks the “What If?” questions. Or your company can choose to be one of those shippers that prefers to be continually “surprised.”

Often these companies are caught off guard because they ignore critical facts and assume that things will always be “OK.” When the inevitable surprises occur, they are forced to react and do things that can be very costly and harm their company's reputation, and risk damaging their customers’ trust in their ability to deliver.

If your company wants to protect its supply chain, TranzAct can help. With our Rapid Assessment, we have a highly effective, structured, and tested process for quickly evaluating your supply chain risks and prescribing remedies. We would welcome the opportunity to have that discussion with you.

As we say each and every week, we’re here to help – and to protect your supply chain!

Give me a call at 630-833-0890, send me an email, or schedule a time to meet.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT

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