On March 26, 2024, the Francis Scott Key Bridge collapsed. Spanning the Port of Baltimore, the Bridge was one of the busiest in the United States, handling more than 444,000 passengers and $80 billion in foreign cargo each year. The collapse of the Bridge will significantly impact supply chains, particularly in the automotive, farming, and construction industries. Businesses relying on either the Bridge or the Port of Baltimore for their supply chain operations may experience challenges in sourcing materials, fulfilling orders, and meeting contractual obligations.
Given the potential for prolonged disruptions, it is crucial for affected parties to assess the impact on their operations and take proactive measures to mitigate risks. As an initial step, affected parties should review their contracts and assess whether force majeure clauses may apply. Force majeure clauses may excuse parties from fulfilling contractual obligations for unforeseen circumstances beyond their control which prevent performance of the contract, such as natural disasters or infrastructure failures. Timely notification of force majeure events is essential to protect parties from liability for non-performance or delays. Where permitted under a contract, affected businesses should promptly provide force majeure notices to relevant counterparties, outlining the impact of the collapse on their ability to meet contractual obligations. Proactive communication and collaboration will be key to navigating these challenging times and minimizing the adverse effects on business operations and relationships.
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