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Auto industry expects minimal disruption from port closure

by SuperiorInvest

Concerns about the impact of the Baltimore bridge collapse on auto imports and exports are beginning to ease as auto companies turn to other ports along the East Coast.

On Thursday, Cox Automotive, a market researcher, said it expected the situation in Baltimore would not have any material effect on U.S. vehicle sales.

“While Baltimore is the primary port for auto shipments, this is not likely to cause or create a sudden new problem in vehicle supply that would materially affect the market,” Jonathan Smoke, chief economist at Cox, said at a conference. telephone. “The port has a lot of exports and imports, but there are alternatives.”

Mercedes-Benz said it had already found other ways to handle the vehicles it normally imports from Germany through Baltimore.

“Together with our transport partners, we successfully reviewed and adapted our supply routes,” the company said in a statement. “We are confident that our cars will be able to ship in time for US customers in April.”

The company added that it already uses the ports of Charleston, South Carolina, and Brunswick, Georgia, in addition to Baltimore. Mercedes also said exports of vehicles it makes in Tuscaloosa, Alabama, and shipments of parts for that factory were not affected.

Most vehicles sold in the United States are assembled in North America. Even for European automakers that have relied on the Port of Baltimore, the impact is likely to be moderate because many of their most popular models are made here.

BMW, for example, manufactures its sport utility vehicles in South Carolina. It imports sedans and sports cars from Germany, but they sell in smaller numbers than SUVs. The exceptions are the BMW 3 and 4 Series sedans. But the automaker should have enough inventory on dealer lots to sustain sales for some time.

At the end of March, BMW had enough vehicles in dealerships to last nearly 70 days at the current sales pace, which is slightly below the industry average, according to Cox Automotive.

Additionally, some of the Port of Baltimore's automotive operations have not been closed by the bridge collapse. The Tradepoint Atlantic terminal, used by Volkswagen, is located at the mouth of the port, east of the Francis Scott Key Bridge, and is still accessible to oceangoing vessels.

Cars are transported on vessels known as roll-on, roll-off ships. These ships require specialized harbor and port facilities. Imported vehicles must also be processed at the port before they can be shipped to dealers. Additional equipment is sometimes installed on railcars before they are loaded onto trucks or trains.

The Port of Brunswick in Georgia already handles hundreds of thousands of cars, trucks and other vehicles a year. Its automotive facility, Colonel's Island Terminal, covers more than 600 acres and has more than 400 acres available for expansion. The ports of Charleston, Jacksonville, Florida, Newark and Norfolk, Virginia, can also accommodate loading and unloading ships.

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