When supply chains run smoothly, the economies they support do too.
But when even the smallest disruption occurs, supply chains can quickly turn into the equivalent of a daisy chain — where one event sets off a cascading impact down the entire logistics value chain.
Experts fear that this is what could happen up and down the East Coast as businesses and shippers try to manage the fallout from the March 26 collapse of Baltimore’s Francis Scott Key Bridge as a result of a cargo ship collision.
According to Maryland Governor Wes Moore port is responsible for over 51 million tons of foreign cargo. That’s the largest in the country. For everybody who was buying cars, everybody who was buying farm equipment, we’re the largest port in country that does that. So, this is not just impacting Maryland.”
In regards to the Energy Industry, smaller companies like RMI Supply are able to remain nimble, ready and able for new business opportunities.
“The big companies and ones involved with mergers or buyouts have an added layer of issues related to time and supply chain,” RMI Supply president Mark Workman said. “Smaller companies can make a decision in the moment, whereas a larger company can take months to make a simple decision.”
Workman explained how this can create financial impacts as well, especially considering the rate of inflation on goods and services.
“The fundamentals of logistics are playing out in front of me where I can see an increase in cargo costs coming, prompting me to make a decision now,” Workman said. “The larger companies can become so bureaucratic it’s hard on them.”
Workman added that during these supply chain impact issues the inability to make a decision will often result in the market making the decision for you and your company.
RMI Supply is a leading provider of specialty oilfield chemicals focusing on delivering environmentally-friendly products to the market combined with a fast and responsive service.
Among the questions around what happens now is what the accident means for shipping and the economy.
The port handled a record amount of cargo last year. While President Joe Biden has said he intends for the federal government to rebuild the bridge, and called on Congress to support that effort, the port is directly responsible for about 15,000 jobs and generated $4.7 billion in economic value to the state of Maryland.
The bridge’s collapse stranded at least 10 vessels in the water and ships outside the blockage have had to reroute to other East Coast ports, such as Norfolk and New Jersey. For global shipping, this comes at a time when companies are contending with route disruptions along the Suez and Panama canals.
Along with being the top U.S. port for autos, Baltimore is also the nation’s furthest inland port, said Houston Mason, adjunct professor of supply chain management at Loyola and Georgetown universities. Companies may have to spend an extra day traveling up the Chesapeake Bay and into Baltimore’s harbor, but once their product is unloaded, it’s closer to the Midwest than it would be at any other East Coast port.
In the last decade, after increasing the depth of berths at its primary cargo terminal, Baltimore has been able to handle substantially larger ships than other East Coast ports, Mason said.
The port is also a major source of employment across the region. A 2018 report found that along with 15,000 direct jobs there were nearly 22,000 other jobs either supported by or indirectly related to activities at the port.
“(The supply chain issues) These are a typical thing over my whole career,” RMI Supply president Mark Workman said. “And during COVID we would be told day in and out that our order was going out today, when the reality was the supplier was just telling me what I wanted to hear.”
Workman, who worked in trucking and logistic prior to oil and gas, said the supply chain issues can become very real and very quick.
“Things become constant after a while, like not having enough drivers or enough trucks,” Workman said. “We learned to adjust to the marketplace and now our company has streamlined our processes from 15 people down to three.”
Workman added that streamlining certain portions of his business rippled into other areas too, which resulted in a huge savings of time and money.
“We can now unload a whole truckload of product for the oil field, label it and get it ready to go on a truck that same day,” Workman said. “In fact, we can now do all that in about two hours.”
RMI Supply is a leading provider of specialty oilfield chemicals focusing on delivering environmentally-friendly products to the market combined with a fast and responsive service.
Click here for RMI Supply’s website and more information.
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