Baltimore bridge collapse won't be the 'straw that broke the camel's back' in global shipping: Economist

In your mind now to to switch gears and go to the the worst possible outcome if it is indeed you know, a situation, and I I appreciate it fully that you know you’re not an engineer or maybe you are. But if we were to see the bridge taking three to five years to get rebuilt, if we were to see, you know, the Baltimore port shut for an extended period of time, we we spoke to someone yesterday that said it could be shut for up to three months. Does that change the dynamics in your mind? Yeah, should have brought my brother on. He’s the the engineer. But from the economic standpoint, if if things are going to take longer to get up and running, we’re kind of talking two key issues. One is you know that short term impacts, are we able to redirect things for that period And ultimately it looks like we’ll be able to absorb most of of those impacts in terms of going to other ports around the US The other one is inventories around the world. So we’re pretty well stopped for coal at the moment. Cars, you know it really depends where you are, but those two factors will be quite nice buffers at the moment as we work through you know, how to actually reopen the port and remove those disruptions longer term. You know if we’re talking this takes you know months into years to kind of get up and running. You know, we might see you know slight upward pressure on aggregate shipping costs around the world. As you know where we we say ships start start docking elsewhere. You know that that does lead to, you know, a bit of traffic, a bit of extra cost that side. But look, I don’t think it’s something to be to be losing too much sleepover. I don’t see aggregate shipping costs around the world moving too much because of this, OK. But but all of this, if we’re just going to zoom out a little bit in order to you know contextualize this a little bit more in terms of a lot of the things that you mentioned in terms of supply chains and in terms of you know, things that that are impacting global shipping at the moment. It’s one thing of many. In terms of it’s just yet another I suppose hit to the the global supply chain considering what’s been happening right now in the Red Sea, what’s been happening in terms of the the geopolitical risks that are currently underway in the Middle East as well and just a raft of other things in trying to slow down, you could probably throw that in there too. So when when you think about the, the state of the, the global economy and all of this additional geopolitical risk, does it just exacerbate any concerns that you might have that, you know, this is just one thing of many that are going wrong at a time where everyone’s trying to combat inflation, but it’s just potentially just another force multiplier in terms of inflationary pressure to the upside? Yeah, you’re absolutely right. I mean, it’s come at a really, really fragile time for global shipping and supply chains. You mentioned what’s happening with the Red Sea and through the Suez Canal. We’re seeing ships having to divert around the bottom of Africa. You know, what’s happening in the Panama Canal as well, Droughts. We’re seeing the number of ships actually able to go through the Panama Canal dropping each day. Add in all of those other geopolitical tensions that you mentioned, you know as well as things that have been going on for a little while now like grain in in Ukraine. So all of those things have added to shipping costs around the world. You know in the last six months alone the, the average shipping cost out of Asia to the US has pretty much doubled. So you know, it’s really not a time where we want more challenges and disruptions to come in and and add to those costs further. I don’t think what’s happened in Baltimore will be the straw that breaks the camels back in terms of that. It’s not going to be the thing that sees prices rocket substantially above where they are, but we certainly wouldn’t want to see much more happen. You know, more port closures, more industrial reaction at ports could really start to disrupt trade significantly more than what we’re saying.