SINGAPORE – The catastrophic bridge collapse in Baltimore on March 26 has closed a major US car and farm equipment hub, and is expected to snarl up port operations on the US East Coast and disrupt the flow of commercial freight on a major interstate highway for months.

While experts agree that any impact on the global supply chain and Singapore will likely be minimal for now, concerns are being raised about the economic effect this would have on the state of Maryland and the rest of the United States, at a time when the Federal Reserve is looking to cut rates in 2024 if inflation stabilises.

The Singapore-flagged container ship crash that downed Baltimore’s Francis Scott Key Bridge and closed the Port of Baltimore “will have a huge economic impact for everybody who is buying cars and farm equipment. We are the largest port in the country that does that”, Maryland state Governor Wes Moore said on March 26.

Baltimore is the largest city in the state of Maryland. Its port is among the top 20 ports in the US by tonnage and number of containers handled, and is also the 10th-largest port for dry bulk.

Mr Moore said it was “imperative” to get the Port of Baltimore up and running as quickly as possible, as its closure would have an economic impact on everyone from car dealers to farmers.

US President Joe Biden on March 26 cited concerns about traffic and jobs tied to the port.

“The Port of Baltimore is the top port in America for both imports and exports of automobiles and light trucks. Around 850,000 vehicles go through that port every single year,” he said.

“Fifteen thousand jobs depend on that port, and we’re going to do everything we can to protect those jobs and help those workers.”

Mr Christian Roeloffs, chief executive of online container logistics platform Container xChange, noted that the jobs support annual incomes amounting to US$3.3 billion (S$4.4 billion), while an additional 139,000 jobs are connected to port work.

The Francis Scott Key Bridge, too, is a key node facilitating interstate commerce.

Part of the I-695 corridor, a major link in the 3,000km north-south Interstate 95 network, it carried more than 12.4 million commercial and passenger vehicles in 2023 – nearly 34,000 trips a day – according to the Maryland Transportation Authority.

“The disruption caused by the bridge collapse could have a ripple effect on the local economy, leading to job losses, reduced business activity, and potentially lower consumer spending,” Mr Roeloffs cautioned in a March 27 report.

He said delays in cargo movement as ships are diverted to other ports on the US East Coast could lead to inventory shortages or losses from perishable goods for some businesses, and that companies should prepare to face higher transportation costs as they seek alternative routes to bypass the affected areas.

“These additional costs could result in increased prices for goods, impacting both businesses and consumers,” he said.

“End consumers could potentially experience delays and price increases for certain products as it could take weeks, if not months, to resume operations at the port.”

The disruptions would come at a time when US consumer prices have started to rise again in recent months, suggesting some stickiness in inflation that is undermining chances of a Federal Reserve interest rate cut before June.

More broadly, the bridge collapse highlights the growing challenges for businesses involved in the US and global supply chains. Many are already contending with the loss of access to the Suez Canal in the Red Sea due to the war in Gaza, and longer waiting times at the Panama Canal as a result of a prolonged drought that has impeded operations.

The Suez Canal and Panama Canal are important maritime corridors that facilitate global trade.

Mr Harry Murphy Cruise, associate economist at financial intelligence firm Moody’s Analytics, said: “The event, though unlikely to significantly affect Asia-Pacific macroeconomic data, serves as a reminder of the fragility of global supply chains amid ongoing geopolitical conflicts, natural disasters and industrial actions.”

He added that such risks “threaten to exacerbate supply chain vulnerabilities and inflationary pressures”.