Baltimore Bridge Collapse: Limited Economic Impact Despite Local Disruptions

Morningstar DBRS published a commentary discussing the potential fiscal and regional supply chain implications of the collapse of the Francis Scott Key Bridge (the Bridge) in Baltimore (the City).

Key highlights include the following:

-- Despite the Bridge’s role as a major artery around Baltimore, its collapse is expected to have a manageable fiscal impact on the City and State of Maryland.

-- While the local impact may be more substantial, we expect the collapse of the Bridge and the blockage of the Port of Baltimore (the Port) will have a limited and temporary impact on regional supply chains.

-- The President’s call for full federal funding to reconstruct the Bridge should further alleviate any fiscal impact.

“In our view, the fiscal impact to Baltimore and the State should be manageable as the bridge toll revenue and tax revenues from the Port form a modest portion of the State’s total revenue,” said Cheryl Saldanha, Assistant Vice President, Global Sovereign Ratings. “Given the Port closure, some shipping disruptions will be inevitable, however, we anticipate the impact to regional supply chains will be limited given alternative shipping re-route options.”