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Economic Fallout from Baltimore's Bridge Collapse Hits Home

Maryland legislators are taking steps to protect workers and businesses affected by the port and highway closure. There are broader, indirect effects, however, that are creating additional uncertainty.

cars parked in front of the fallen Francis Scott Key Bridge (distance)
A remaining section of the Francis Scott Key Bridge is seen in the distance beyond the roll-on/roll-off lot at Seagirt Marine Terminal along Broening Highway.
(Jerry Jackson/TNS)
In Brief:
  • The now-crippled Port of Baltimore is responsible for 15,000 direct jobs and 140,000 indirect jobs and brings in over $70 billion in revenue every year.  

  • Baltimore is bracing for losses in tax revenues and fees, while regional inflation is expected to spike after the bridge's collapse.

  • Analysts caution that the disaster’s lasting economic impact will be in how workers and small businesses in communities around the port fare.

  • Every day of limited operations at the Port of Baltimore may cost as much as $15 million a day in economic activity.

    The port is one of the city’s main economic arteries. Weeks after the Francis Scott Key Bridge collapse shut the port down, the full economic impact remains uncertain, but legislative efforts to protect workers and promises from some of the port’s major employers seek to minimize long-term impacts.

    First designated as a port of entry in 1706, the Port of Baltimore has since grown to one of the largest and busiest ports on the East Coast, with an economic value of just over $70 billion a year. The port supports over 15,000 direct jobs and around 140,000 jobs that are indirectly connected to work at the port, with Maryland residents collecting just over $5 billion in total personal income in 2023.

    The port is a major hub for vehicles, containers and commodities. Baltimore ranks first among U.S. ports for autos and light trucks, handling a record 850,000 vehicles last year. Importantly, the port is where vehicles are processed and labeled to be sold domestically. It is also a major port for coal, coffee and sugar among other commodities and is vital in supply chains across many sectors.

    Most of the direct jobs impacted by the port closure are longshoremen and stevedores – people directly responsible for loading and unloading cargo from ships. While Scott Cowan, president of a local longshoremen union, told NPR that some maintenance workers and mechanics are working at the port but when it comes to labor-intensive jobs like unloading and loading vessels, “that’s not happening right now.”

    In addition, major employers in the area such as Amazon, UPS, FedEx and Domino Sugar collectively have thousands of workers that are directly impacted by the current reduction of port functions. The U.S. Army Corps of Engineers currently estimates that it will be at least seven weeks before the port returns to full operations. A recent fact sheet from the Biden White House states that these employers are committed to refrain from layoffs during this period.

    When it comes to workers who benefit indirectly from the port, those 140,000 people make up over half of Baltimore’s total workforce. Many of these workers are employed by smaller, local-run businesses that cater, in part, to the needs of workers at the port. All of these workers need to figure out how to make ends meet during the shutdown. Many have turned to public safety nets such as food stamps and unemployment benefits (which lasts up to 26 weeks in Maryland).

    Maryland legislators have taken additional steps to make things easier for these workers and their employers. Called the PORT Act, this emergency legislation will, in part, support businesses and workers affected by the bridge collapse and port closure. The bill, which was signed into law on April 9, allows Gov. Moore to use up to $275 million of Maryland’s $2.3 billion rainy-day fund to offset expected wage losses for workers and employers impacted by the port’s closure and reduced operations. The goal of the emergency measure is to help employers keep workers on without resorting to layoffs.

    “[The PORT Act] will probably reduce the impact on state income tax revenue and will provide some relief to affected businesses in the immediate area,” says Benjamin Orr, founder of the Maryland Center on Economic Policy. “Their customers working at the port will still have some financial resources to be able to buy things from them.”

    That said, Orr cautions that the PORT Act, “may not be enough to save everyone.” Some employees may not qualify for unemployment benefits or other safety nets. In cases like the small community of Dundalk, now largely isolated from traffic due to the bridge collapse, small businesses won’t see the same amount of traffic they did just weeks before and owners may struggle to make ends meet even after full operations are restored at the port.

    A lot depends on timelines for the port's reopening holding to the less than two months estimated by the U.S. Army Corp of Engineers. Economics professor Francesco Bianchi at John Hopkins says timing is everything.

    “If the closure lasts for a short period of time, we can definitely allow people to just stay home for three months, and then go back to their regular jobs afterwards,” Bianchi says. “If this [becomes] a longer period of time, that's way more complicated, because it's hard to indefinitely keep people at home.”

    With the port on pause, so too is the flow of money in and out of the port. As the largest port in the United States for roll-on/roll-off ships, the port and bridge were responsible for the movement of over 30,000 vehicles daily in addition to a large volume of container ships and exports of goods such as salt and sugar. The port is also one of the largest coal export ports in the world and, in 2023, moved 19 million U.S. tons valued at $433 million in revenue.

    The Port of Baltimore brought in around $647 million in state and local tax revenues in 2023. $52 million of that was in transportation funds. That figure may have an outsized impact as the state grapples with a previously predicted $3.3 billion budget shortfall over the next six years of funding their transportation plan. The other impact on the area’s transportation funding? The loss of the bridge also means a loss of $53.7 million, or 8 percent, of the state’s toll revenue. That could extend to over half a billion dollars over the next decade.

    To Orr, it will likely take some time for us to know the true toll that the bridge collapse and port closure have had on Baltimore – the next round of budget estimates won't be released until September. However, there are some places where the city will immediately start to see the pressure.

    “I think the impact on small businesses is going to be the most obvious,” Orr says. “I think there will be a slight increase in regional inflation, but the most obvious examples will be how workers and small businesses are doing in communities that serve the port.”

    Zina Hutton is a staff writer for Governing. She has been a freelance culture writer, researcher and copywriter since 2015. In 2021, she started writing for Teen Vogue. Now, at Governing, Zina focuses on state and local finance, workforce, education and management and administration news.
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