MSC, the world’s largest ocean carrier, has joined the list of ocean carriers that have stopped delivering rerouted containers to shipping customers outside the port following a container ship accident near the Port of Baltimore that resulted in the tragic collapse of a bridge. With the Port of Baltimore closed indefinitely, the decision places the responsibility on shippers to pick up cargo at the diversion port and deliver it to its final destination.
In an email to customers obtained by CNBC on Thursday, MSC explained that for customer containers already on the water bound for the Port of Baltimore, the cargo will be rerouted and unloaded at another port for pickup.
“For these cargoes, the carriage contract will be declared terminated at this alternative port and storage, D&D and transportation costs to the originally intended destination will be borne solely by the cargo,” the MSC announcement said.
“Routes to and from Baltimore are currently not possible and may not resume for weeks if not months,” MSC added.
CMA CGM, COSCO and Evergreen were the first carriers to announce similar moves and in some cases formally declare “force majeure,” a legal term for The right to waive contractual obligations when an event beyond a party’s control occurs.
In its customer communication, MSC said it “apologizes for the disruption caused by this contingency plan, which is undertaken in response to an event beyond our control but is undertaken in accordance with the terms of the carriage contract.”
MSC did not immediately respond to CNBC’s request for comment.
Maersk is the only major carrier to say it will offer customers shipping services from the rerouted port.
The Dali, a 10,000-ton container ship chartered by Maersk, lost control and hit the Francis Scott Key Bridge early Tuesday morning.
Logistics companies have been scrambling to develop alternative shipping plans and keep up with carrier rerouting since the crash, with executives telling CNBC on Wednesday that the next few days will be critical in moving rerouted trade away from the Port of Baltimore.
The Port of Baltimore is the 11th largest port in the United States and ranks No. 1 in the U.S. for imports and exports of automobiles/light trucks and farm tractors, in addition to handling apparel, household goods, construction materials, electronics and appliances, and agricultural products.
Among unresolved issues, logistics executives point to ocean carriers not updating their ship transits quickly enough to alert them to new rerouted ports so they can plan customer container pickups.
Major ports up and down the East Coast, including Savannah, Brunswick, Virginia, Charleston and New York/New Jersey, as well as companies that provide chassis for rail and trucking, have said they have the ability to expand operations to accommodate incoming cargo. needs.
In a series of updates, MSC sent a list of 23 ships arriving at diversion ports between March 28 and April 29. Eight were diverted to unknown ports, 11 to New York/New Jersey; three to Norfolk; and one to Philadelphia.
Transportation Secretary Pete Buttigieg held a meeting with supply chain professionals on Thursday to discuss the crisis and how to ease congestion. Attendees included ocean carriers CMA CGM, Maersk, MSC, Evergreen and railroads CSX and Norfolk Southern. The Port of New York/New Jersey, Georgia, Baltimore, Philadelphia, Jacksonville, South Carolina and Virginia were also in attendance. Shipping customers in attendance include John Deere, Stellantis, Home Depot, Under Armor and Volkswagen.
“We are better positioned than we were several years ago to mitigate supply chain disruptions due to increased coordination across the supply chain and new efforts to strengthen our physical and digital infrastructure,” Buttigieg said at the meeting.
National economic adviser Lael Brainard, who was present at the meeting, noted that during previous disruptions, a lack of complete information from different parts of the private and public sectors hampered decision-making capabilities and responses. She sees the recent DOT FLOW initiative as a game-changer. “It has been launched to leverage the full capabilities of all agencies across the federal government to ensure that we are helping ocean carriers, port leaders, railroads, shippers and unions come together to assess potential supply chain impacts and then work together to address them. ”
Paul Brashier, vice president of drayage and intermodal transport at ITS Logistics, said the biggest challenge may be smaller companies that coordinate bookings on their own and may not have connections at these rerouted ports. “You want to get the diverted containers out of the port as quickly as possible so you don’t incur any detention and demurrage fees. For some of these shippers, they’re starting from scratch,” Brashear said.
Once the container arrives at the dock, the idle time allocated to the container begins to count. Once the idle time expires, demurrage and demurrage charges will begin unless the port agrees to waive it.
“We’re looking at whether the terminals will extend the free hours or waive the fees,” Brashear told CNBC on Wednesday. “That’s the question right now.”
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