The steel frame of the Francis Scott Key Bridge sits on top of the container ship Dali after its collapse on March 26, 2024, in Baltimore, Maryland.
Roberto Schmidt | AFP | Getty Images
Logistics companies across the East Coast scrambled to communicate import and export status messages back and forth to customers Tuesday after the Port of Baltimore was closed due to the collapse of the Francis Scott Key Bridge. Massive rescue efforts were underway Tuesday morning.
“Our first priority is for customers to plan for containers to be shipped initially to Baltimore and then unloaded at other East Coast ports,” explained Paul Brashier, vice president of haulage and intermodal at ITS Logistics.
“These diverted cargo volumes will impact ports in New York/New Jersey, Norfolk and the Southeast, and we must prepare trucking and transshipment capacity to move cargo to the intended network,” Brashear said.
The Daly, a cargo ship carrying 10,000 containers, collided with a bridge pillar as it left the Port of Baltimore on its way to Colombo, Sri Lanka, early Tuesday morning. Two pilots from the Port of Baltimore were on board the vessel at the time of the collision.
On March 26, 2024, the steel frame sank into the water after the Francis Scott Key Bridge collapsed in Baltimore, Maryland.
Roberto Schmidt | AFP | Getty Images
“The immediate impact is on cargo on ships and their accessibility. Other shipments scheduled to go through Baltimore may be rerouted, potentially increasing traffic to New York, Norfolk and nearby ports,” said Goetz Alebrand, senior vice president and head of ocean freight. DHL Global Forwarding handles shipments to the Americas. “Bullet and trucking companies that rely on Baltimore must evaluate operations under a prolonged shutdown.”
Maryland Governor Wes Moore said more than 52 million tons of foreign cargo worth about $80 billion were shipped out of the port last year. Baltimore is the nation’s 11th largest port, with an average of 207 calls per month last year, according to shipping magazine Lloyd’s List.
Top ports for car shipping
The Port of Baltimore is the largest import and export port in the United States for cars and light trucks, as well as wheeled agricultural vehicles and construction machinery.
Last year, the port handled 847,158 cars and light trucks, according to port data. This is the 13th consecutive year that Baltimore has led all U.S. ports in car and light truck imports. Other major imports include sugar and gypsum.
On February 8, 2024, BYD electric vehicles waiting to be shipped were stacked at the Taicang Port International Container Terminal in Suzhou, Jiangsu Province, eastern China.
STR | AFP | Getty Images
Broken down by trade, cars and light trucks accounted for $23 billion of the port’s total imports of $55.2 billion in 2023. About $4.8 billion of the port’s exports were motor vehicles.
D’Andrae Larry, head of intermodal transportation at Uber Freight, said: “Since Baltimore is less container-centric and is primarily a roll-off port, this disruption should create possible flatbed and car volume for other East Coast ports.” .
Larry said the bridge and port could be out of service for months after the collapse, forcing cargo to be diverted first to ports in New York and New Jersey and then to Norfolk, Virginia. Other ports include Georgia and South Carolina.
“Customers will be looking for solutions for freight that typically passes through Maryland, the mid-Atlantic, the upper Midwest and New England,” he said. “There are fewer intermodal options around Baltimore, but shippers can now turn to intermodal for inland shipping as an alternative. “
trade flow diversion
retailers like The Home DepotBob Furniture, IKEA and Amazon These are just some of the companies that use the port to import goods. Other major imports include sugar and gypsum.
Richard Mead, editor-in-chief of shipping magazine Lloyd’s List, said: “This will have an impact on trade across the east coast and will continue until we know how quickly ports can reopen. .”
On Tuesday, the ship had been rerouted to New York and then to Virginia, Mead said. “As long as Baltimore is closed, there will be dozens of diversions next week and hundreds more in the coming months.”
Matt Castle, Vice President, Global Freight CH Robinsonexplained to CNBC Trucks entering the port area from the north should expect minimal delays. “But for trucks coming into the area from the south, they’re going to have to take the I-95 or I-895 tunnels or go around the port. That puts them closer to Baltimore Metro and potentially adds an hour to the trip.”
Traffic warning signs were erected on Route 95 after a cargo ship collided with the Francis Scott Key Bridge in northeastern Maryland on March 26, 2024, causing the bridge to collapse.
Kenabtankur | Getty Images
Gasoline supplies to the Baltimore area could also be disrupted because some ethanol is shipped by barge and rail.
“The gasoline shipped by pipeline from Gulf Coast refineries is blended with 10 percent ethanol and then shipped by train and barge to the Baltimore area,” said Andy Lipow, president of Lipow Oil Associates. “The oil industry will have to find alternative supplies for these barge shipments. route, which could be met in the short term by trucking from Philadelphia.”
Liebo said injection fuel and diesel supplies likely would not be affected. But once the diversions are completed, these diversions come with additional costs in terms of transportation and trucking.
“It’s going to be expensive, but it’s not a supply chain story like EverGiven (stuck in the Suez Canal) because ocean carriers will find alternative routes,” Mead said. “Logically, ocean carriers and trucks Transportation has the ability to be very adaptable and agile.”
Dali number is made of Maerskissued a customer advisory on Tuesday.
“The Port of Helen Delich Bentley in Baltimore is temporarily unavailable. Therefore, we will omit Baltimore from all services for the foreseeable future until it is deemed safe to travel through the area,” the company said.
“For cargo that is already on the water, we will omit that port and will unload cargo bound for Baltimore at a nearby port. Please note that for cargo that is ready to be unloaded in Baltimore, there may be delays as they need to be unloaded at other ports, ” Maersk Consulting said.
Impact on exporters
If exporters choose not to wait until waterways reopen, they could face higher trucking and rail rates if they reroute cargo by truck or rail to alternative ports such as Norfolk or New York/New Jersey, said Judah Levine, director of research at Freightos. Case.
Baltimore’s major exports include coal, natural gas, aerospace parts, construction machinery, agricultural parts and soybeans.
“The collapse of the Baltimore Bridge mainly affects coal exports from the CNX and CSX terminals,” said Madeleine Overgaard, dry goods market data manager at global trade data platform Kpler. “In addition, gypsum and sugar imports at the Port of Baltimore will also be disrupted.”
“Alternate ports will also be used for the arrival of imported cargo,” Levine said. “These should be able to handle the additional volumes, although the rerouting may cause some congestion or delays for importers, which could impact freight rates on the Asia-U.S. East Coast and transatlantic routes.”
Early cost estimates
Shipping rates from Asia to the U.S. East Coast have risen due to diversions away from the Red Sea following months of attacks by Houthi rebels on international shipping vessels.
An aerial view shows the cargo ship Dali after it struck the Francis Scott Key Bridge and collapsed in Baltimore, Maryland, March 26, 2024.
Thasos Katopodis | Getty Images
But they have come down from their peaks as demand slows and carriers adjust for longer voyages. As of Tuesday, transatlantic freight rates were essentially unchanged from 2019 levels, at about $1,659/FEU (40 equivalent units).
While trade is flexible and will change routes, in the long term the bridge will need to be designed and rebuilt from the ground up, which will take years.
“It’s going to be more than two years,” said Lloyd’s Meade. “This infrastructure project will be a major disruption and a high cost. In 1977, the bridge cost $60 million. Given inflation and the rapid pace of redesign and construction, the procurement premium will increase. This will be A very expensive project.”
The Dali is insured by Britannia Steam Ship Insurance and operated by charter company Synergy Group. The vessel is owned by Great Ocean Investment.
“Great Britain Steamship Insurance is a mutual (protection and indemnity group) insurance, which means the risk is shared by the industry,” Mead said.
“Britannia will cover the initial $10 million. Overall, the overflow will go into the industry’s pooling mechanism and then be reinsured,” Meade said.
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