MSC, the largest ocean carrier in the world, has announced that it will no longer deliver diverted containers outside of the port for shipping clients following an accident involving a container ship near the Port of Baltimore that caused a bridge collapse. The Baltimore port is currently closed indefinitely, leading to the responsibility of cargo pick up being placed on the shipper. Containers bound for the Port of Baltimore will now be rerouted and discharged at alternate ports for pick-up, with the costs of storage, D&Ds, and on-carriage to the initially intended destination falling on the cargo’s account.
CMA CGM, COSCO, and Evergreen were among the first carriers to implement similar measures, with some declaring ‘force majeure’. MSC apologized to customers for the disruptions caused by these changes but emphasized that they were necessary due to events beyond their control and in compliance with the terms of the contract of carriage. Maersk, on the other hand, has committed to providing transport for diverted ports for customers. The impact of the recent container ship accident near Baltimore has caused logistics companies to scramble for alternate transport plans and keep up with carrier diversions. As a result, the next few days will be crucial in managing diverted trade away from the Port of Baltimore.
The Port of Baltimore is crucial in auto/light truck and agriculture tractor imports and exports, as well as handling various other commodities like clothing, electronics, and produce. One of the challenges faced by logistics executives is the lack of updated vessel transits by ocean carriers to alert them to the new diverted port, making it difficult to plan for customer container pick-up. Major ports along the East Coast have assured CNBC that they have the capacity to ramp up operations to accommodate incoming cargo. MSC has shared a list of 23 vessels scheduled to arrive at diverted ports between March 28-April 29, with several ships heading to ports like New York/New Jersey, Norfolk, and Philadelphia.
Transportation Secretary Pete Buttigieg recently held a meeting with supply chain professionals to address the crisis caused by the bridge collapse near the Port of Baltimore. The meeting included representatives from ocean carriers, railroads, and major ports, as well as shipping clients like John Deere, Stellantis, and Home Depot. Buttigieg highlighted the increased coordination across the supply chain thanks to efforts to strengthen physical and digital infrastructure. National Economic Advisor Lael Brainard also emphasized the importance of information sharing to enhance decision-making capabilities and response in times of disruptions.
Paul Brashier, vice president of drayage and intermodal at ITS Logistics, pointed out that smaller companies without established relationships with diverted ports may face challenges in coordinating bookings. The goal is to expedite the removal of diverted containers from ports to avoid detention and demurrage fees that start once the allocated free time expires. Brashier mentioned the importance of waivers or extensions on fees by terminals to alleviate financial burdens on shippers. As the situation continues to evolve, the focus remains on mitigating disruptions and ensuring a smooth flow of cargo across different points in the supply chain.
