Tesla, GM, Ford Supply Chain Concerns: Baltimore Port Closure 'Going To Have An Impact'
Tesla Inc (NASDAQ:TSLA), Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) were all hands on deck to find alternative shipping routes on Wednesday after a bridge collapse caused the shutdown of the Port of Baltimore.
Ford and GM said they expected minimal impact, although the East Coast port is the biggest handler of cars, trucks and farming equipment in and out of the U.S. Tesla also ships its European exports through the port, but did not comment on how the closure will affect its trade.
“It's too early to say what impact this incident will have on the auto business – but there will certainly be a disruption,” said John Bozzella, president and CEO of Alliance for Automotive Innovation, in a statement.
He added: “Baltimore is the No. 1 automobile port in the U.S., and we're in touch with federal officials to help them understand the scale of automotive operations there.”
Ford Chief Financial Officer John Lawler told Bloomberg TV: “It's a large port with a lot of flow through it, so it's going to have an impact.”
He added: “We'll work on the workarounds. We'll have to divert parts to other ports along the East Coast or elsewhere in the country.”
Ford shares fell 3.6% on Tuesday following the collapse of the Francis Scott Key Bridge when it was hit by a container ship. The bridge debris blocked off the main port entrance, although some surrounding quays remained operable.
General Motors said in a statement: “We expect the situation to have minimal impact to our operations. We are working to re-route any vehicle shipments to other ports.”
Shares in GM were little affected, climbing 0.7% on Tuesday and up 1% in opening trade on Wednesday.
European Carmakers
European carmakers that ship their vehicles to the U.S. said they didn’t expect a major impact.
Volkswagen AG (OTC:VWAGY), the German manufacturer, said its operations in Baltimore were in a location that was unaffected by the bridge collapse, but said it may experience trucking delays as traffic will be rerouted in the port area. Shares gained 0.7% on Tuesday.
Mercedes Benz Group AG (OTC:MBGAF), the German luxury car brand and truck manufacturer, said it was too early for it to see an impact. Mercedes shares fell 0.8% on Tuesday.
Cruise Operators
Carnival Corporation said on Wednesday as it reported in-line earnings and raised profit guidance for 2024 that it would see an estimated negative impact of around $10 million due to the closure of its Baltimore port operations.
The company said it would relocate its home port to Norfolk, Virginia, in a statement that read: “We will update our future cruise guests on when we will return home to Baltimore, but in the meantime, we appreciate the quick response and support from officials in Norfolk.”
Carnival shares were down 2% in early trade.
Royal Caribbean Cruise Lines (NYSE:RCL), which also operates out of Baltimore, said: “We are closely monitoring the situation, and our port logistics team is currently working on alternatives for Vision of the Seas’ ongoing and upcoming sailings.”
Shares were 1% higher on Wednesday.
Coal Exports
Outside of the automotive sector, coal exporters were hit, as Baltimore is the second busiest U.S. port that handles the commodity, most of which is shipped to India.
Shares in coal exporter Consol Energy Inc (NYSE:CEIX) fell 4.3% on Tuesday. It said on Tuesday that access to its marine terminal at Baltimore had been delayed and that it was looking at alternatives to minimize any impact on its operations. Consol shares were back up 4% on Wednesday.
Rail freight company CSX Corporation (NYSE:CSX) saw its shares fall 2% on Tuesday after it warned customers to expect delays for coal deliveries from its Curtis Bay coal pier at the port. The shares reclaimed 1.3% on Wednesday.
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