BALTIMORE — In the supply chain logistics sector, you plan for a disaster you hope never comes.
On March 26, it did. The Key Bridge collapsed, shutting down the Port of Baltimore. But companies like Nexteruswere prepared; they’ve had practice.
"I think the last big devastation was the pandemic, and prior to that, 9/11,” CEO Sam Polakoff said. "So we're sort of their outsourced supply chain department. So it's our job to be on top of everything that's happening in the world and when something like this happens, we spring into action."
The re-routing began immediately. Nexterus, which was founded in Baltimore but is now based New Freedom, Pennsylvania, uses software to help importers figure out the cheapest, and most convenient alternate option.
"So with the case of a port closing, what's the nearest port we can bring this into? What will the additional cost be? What will the additional time delay be?” Polakoff explained.
Most cargo is getting off-loaded in New York and then sent to Baltimore by truck or train. Existing supply chain concerns - a shortage of drivers, a shortage of freight equipment like ‘chassis,’ - are now heightened.
“I think it’s just a matter of finding capacity, making sure the ports in New York, where freight is being dropped off that wasn’t expected to be dropped off, can handle that volume,” Polakoff said. "When there's an unexpected surge in a particular part of the country in any form of logistics, it creates those kinds of worries. Will you have equipment; will you have drivers; will you have a capacity; and will you have labor?"
As for delays, he says: "It’s not too bad. New York is obviously a very large and efficient port. As long as we can get capacity, we can move it down here in a day."
All in all, Polakoff says it’s been an inconvenience, with some associated extra costs. But with a light at the end of the tunnel - a projected reopening date at the end of May - it’s manageable for his clients.
“To the importer, it may not have been as painful as they originally thought it would be. To some of the local people here in Baltimore, who’s jobs are fully dependent on the total operation of the port, it’s been totally devastating.”
What about for the consumers? Polakoff says we can expect to see a price increase on some goods, primarily industrial products and home-building products.
"I think that's always a certainty, to be honest. Most suppliers are of the mindset that they have to pass costs on along when unexpected things happen and costs increase. I like to believe in the goodness of people, and the fact that most suppliers are not out there trying to raise prices just to raise prices. They're probably trying to mitigate it to the extent possible."
On Friday, a third temporary channel opened for ‘essential’ vessels. The Captain of the Port expects it’ll facilitate about 15% of “pre-collapse commercial activity."
