How will the Baltimore Key Bridge collapse impact national and regional supply chain?
Tuesday’s tragic bridge collapse at the Francis Scott Key Bridge over the Port of Baltimore has triggered a scramble among companies to adapt their supply chains due to the port’s closure.
With our headquarters in Pittsburgh, we recognize the vital role waterways and bridges play in the economy, facilitating the transportation of goods across and out of the country every single day.
The collapse of this critical bridge has widespread implications at both local and national levels, leading company leaders to assess supply chain risks and seek strategies for mitigation, asking: “What are the supply chain risks to my company, and how can we minimize them?”
What Effects Will the Key Bridge Disaster Impact Businesses and Customers?
As one of the largest ports in the nation, the port of Baltimore is a critical supply chain point for the auto, construction, machinery and coal industries. To put the importance into perspective, the port handled 52.3 million tons of foreign cargo worth an estimated $81 billion in 2023 and produced more than 15,000 jobs.
Many of those crucial industries have roots within the Pittsburgh, Philadelphia and Columbus regions, causing an impact to those region’s companies and ports.
Companies can be affected on the inbound or outbound side of their supply chain. If the inbound side is impacted, a delay in receiving supplies could equate to a delay in manufacturing. If a delay is caused, manufacturing schedules will need to be adjusted to adapt to the shift in resources, and as a result the company can have a negative financial impact.
If the outbound side is impacted, the company may see a delay in customer’s receiving their goods, causing a potential negative impact on their professional reputation. The delay could also affect shipping and receiving metrics and delivery standards for the company.
How Can Companies Mitigate Supply Chain and Logistics Risk?
There are a number of different ways that a company can mitigate their supply chain and logistical risk, including:
- Applying dynamic transport modes such as automated freight management or automated shipping processes.
- Conducting evaluations of the supply chain frequently. By completing these evaluations, which can be done using data collected manually or through the use of AI, the company can learn the viable pain points and vulnerabilities within the supply chain and determine where efficiencies can be gained.
- Developing a disaster recovery plan for their supply chain(s)
- Having visibility into suppliers’ suppliers by having the ability to track and receive notification of shipping orders. This can be conducted by using RFID sensors within shipping packaging.
- Using standardized freight documentation, giving the company the ability to use different modes of transportation or different ports of entry.
- Utilizing vendor diversification through either multisourcing or nearshoring (using suppliers and distributors close to your operations or close to the critical points in your supply chain)
- Utilizing the PPRR Risk Management model, a population global supply chain risk management strategy.
- Prevention – precautionary measures to reduce supply chain risk
- Preparedness – develop and test the disaster recovery plans for those applicable supply chain risks
- Response – successful implementation of the disaster recovery plans
- Recovery – working to repair and restore all affected areas timely and in order of critical prioritization (this would be determined within the Preparedness and Response steps)
How Can Schneider Downs Help?
Schneider Downs can help organizations of all sizes and industries evaluate the company’s risks, assist with improvement of the supply chain risk management for your company, consult on the adequacy of your disaster recovery plan, and assess if supply chain and logistics are an area of elevated concern given the changing infrastructure of today.
If you have any questions about supply chain risk, please contact our team directly at [email protected].
About Schneider Downs Risk Advisory
Our team of experienced risk advisory professionals focus on collaborating with your organization to identify and effectively mitigate risks. Our goal is to understand not only the risks related to potential loss to the organization, but to drive solutions that add value to your organization and advise on opportunities to ensure minimal disruption to your business.
For more information visit our Risk Advisory Services page.
