'Baltimore collapse may impact APAC region trade'

The catastrophic collapse of Baltimore’s Francis Scott Key Bridge on March 26 has hinted at the suspension of trade through the port and as investigations into the cause of the accident begin, initial assessments suggest that the impact on the Asia-Pacific region should be relatively limited, as per a report by Moody’s Analytics.

The automotive sector and coal markets, are expected to bear the brunt of the incident, which saw a container ship leaving the Port of Baltimore crash into the world’s third-longest truss bridge.

The incident, as per Harry Murphy Cruise, Economist, Moody’s Analytics, serves as a stark reminder of the fragility of global supply chains, particularly in the face of ongoing geopolitical conflicts, natural disasters, and industrial actions. These factors pose significant challenges to the stability of supply chains and could exacerbate inflationary pressures in the future.

As per Moody’s Analytics, the incident’s impact will be on auto markets, particularly Asia-Pacific’s largest car exporters like China and Japan, which rely heavily upon Baltimore for their imports.

Moreover, the coal market is also set to be significantly affected, given that over a quarter of U.S. seaborne coal exports pass through the Port of Baltimore, as per the report.

“The coal market is also affected, with over a quarter of U.S. seaborne coal exports, which make up about 1.5% of the global coal trade, facing potential disruptions. This could influence global coal trade dynamics, reminiscent of past shifts in supplier relationships due to geopolitical actions,” Moody’s Analytics report read.

Despite the immediate challenges posed by the bridge collapse, it is suggested that the long-term impact on coal and vehicle prices may be mitigated by the resilience of global supply chains.

“Historical instances, such as China’s ban on Australian coal and sanctions on Russian coal, suggest that while there may be initial disruptions, global trade tends to adapt by finding alternative sources and markets, likely minimizing long-term impacts on coal and vehicle prices.

Roy Walsh

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