Ocean
carriers
are
declaring
“force
majeure”
due
to
the
Baltimore
port
bridge
crisis,
telling
logistics
companies
and
U.S.
shippers
including
retailers
that
once
cargo
is
dropped
off
at
alternate
ports,
it
becomes
their
responsibility
to
pick
up.
In
an
alert
to
customers
Tuesday,
CMA
CGM
wrote,
“Those
(containers)
on
the
water
will
be
discharged
at
an
alternate
port
where
they
will
be
made
available
for
pick-up,
and
CMA
CGM’s
bill
of
lading
will
terminate.”
It
was
the
first
ocean
carrier
to
declare
force
majeure
—
the
provision
in
a
contract
that
frees
parties
from
an
obligation
due
to
events
beyond
their
control.
COSCO
announced
Wednesday
morning
that
its
services
would
“be
concluded”
once
the
diverted
container
arrives
at
the
alternate
port.
Evergreen
announced
the
same
measure.
In
contrast,
Maersk
is
providing
transport. “For
cargo
already
on
water,
we
will
omit
the
port,
and
will
discharge
cargo
set
for
Baltimore,
in
nearby
ports.
From
these
ports,
it
will
be
possible
to
utilize
landside
transportation
to
reach
final
destination
instead,”
Maersk
said
in
an
alert
to
customers.
Though
it
noted
that
the
situation
remains
fluid.
“We
are
still
working
through
the
various
contingencies
with
our
customers
and
will
continue
to
provide
both
specific
and
general
customer
advisories
as
the
matter
progresses,”
it
said.
Ocean
carriers
Hapag
Lloyd
and
MSC
did
not
respond
to
requests
for
comment
about
their
plans.
Logistics
executives
tell
CNBC
the
next
36
hours
will
be
critical
in
the
movement
of
the
diverted
trade
away
from
the
Port
of
Baltimore
after
the
deadly
accident
of
the
10,000-container
capacity
containership
Dali
crashed
into
the
Francis
Scott
Key
Bridge
in
the
early
hours
of
Tuesday.
According
to
ImportGenius,
the
Dali
unloaded
freight
on
March
24
which
included
clothing
and
household
goods
that
could
be
on
the
diverted
vessels,
also
ranged
from
approximately
80
containers
of
Satsuma
mandarin
oranges,
approximately
74
containers
of
IKEA
products
and
furniture
to
104
containers
of
Electrolux
products
including
chest
freezers,
air
conditioners,
and
microwaves.
The
Port
of
Baltimore
is
also
No.
1
in
the
U.S
for
auto/light
truck
and
agriculture
tractor
imports
and
exports.
The
supply
chains
for
major
wood
panel
importers,
including
Lumin
Forest
Products,
Sudati,
and
Arauco,
also
rely
heavily
on
Baltimore.
“The
impact
of
the
Baltimore
port
stoppage
on
construction
and
contractor
supply
chains
may
be
significant,”
said
William
George,
director
of
research
for
ImportGenius.
One
problem,
according
to
logistics
managers,
is
that
ocean
carriers
are
not
updating
their
vessel
transits
fast
enough
to
alert
them
to
the
new
diverted
port
so
they
can
plan
for
their
customer’s
container
pick-up.
Paul
Brashier,
vice
president
of
drayage
and
intermodal
at
ITS
Logistics,
tells
CNBC
it
is
fielding
calls
from
clients
asking
where
their
containers
are
going.
“They
are
concerned
they
will
be
charged
container
late
fees
[detention
and
demurrage]
if
they
don’t
get
their
containers
out
of
the
terminals
as
soon
as
possible.”
The
urgency
of
picking
up
diverted
containers
has
increased
as
ocean
carriers
declare
“force
majeure”
on
Baltimore-bound
containers
once
the
boxes
arrive
at
the
diverted
port,
and
companies
who
have
imported
their
products
need
to
to
find
transportation
to
move
the
cargo
before
container
late
fees
are
charged.
“The
biggest
thing
we
are
seeing
from
our
data
integrations
with
the
ocean
carriers
is
we
are
not
seeing
the
port
of
discharge
updated
yet,”
Brashier
said,
citing
the
ITS
Logistics’
ContainerAI
platform.
“So
what
we
are
doing
now
is
we
will
have
to
manage
logistics
of
containers
through
the
data
given
to
us
by
the
terminals.
But
that
means
we
are
alerted
when
the
container
has
already
arrived,
versus
planning
while
the
container
is
still
en
route
to
the
port.”
Once
a
container
arrives
at
a
terminal,
the
clock
begins
ticking
on
the
free
time
allocated
to
a
container.
Once
that
free
time
expires,
the
detention
and
demurrage
fees
start.
“We
are
looking
to
see
if
terminals
will
either
give
an
extension
of
free
time
or
waive
the
fees,”
Brashier
said.
“That’s
the
rub
right
now.”
Tracking
containers
diverted
from
Baltimore
To
help
navigate
the
supply
chain
slowdowns
during
crises
and
disruptions,
the
U.S
Department
of
Transportation
created
a
private/public
digital
platform
for
supply
chain
monitoring
called
Freight
Logistics
Optimizations
Works
(FLOW.)
It
was
created
two
years
ago
and
has
since
expanded
to
over
70
participants,
and
an
additional
60
plus
companies
waiting
to
be
onboarded.
FLOW
has
partnered
with
retailers
including Home
Depot, Nike, Walmart,
and Target;
railroads Union
Pacific and
BNSF;
and
logistics
providers CH
Robinson,
DHL, and
FedEx.
The
aggregation
of
data
from
these
participations
provides
a
platform
where
real-time
data
analysis
can
be
made
on
port
and
inland
network
congestion
and
can
monitor
unexpected
cargo
shifts
caused
by
world
events,
such
as
the
unfolding
accident
at
the
Port
of
Baltimore.
Officials
from
the
DOT’s
Office
of
Multimodal
Freight
tell
CNBC
they
have
heard
from
FLOW
ocean
carriers
and
shipper
members,
and
they
are
evaluating
near-term
and
medium-term
options
to
divert
their
cargo
given
the
collapse
of
the
Francis
Scott
Key
Bridge.
“Because
FLOW
helps
us
see
real,
forward-looking
data
on
ocean
bookings
15,
30,
45
and
60
days
out,
participating
in
this
data-sharing
program
means
we
could
start
seeing
industrywide
where
those
re-bookings
are
gravitating
to,”
said
Matt
Castle,
vice
president
for
global
forwarding
at
CH
Robinson,
adding
that
all
ocean
bookings
in
and
out
of
Baltimore
have
to
be
rescheduled
until
the
port
is
operational
again.
“Before
we
send
our
customers’
cargo
to
those
ports,
that
should
be
helpful
in
ensuring
they
have
enough
equipment,
have
enough
appointments
and
are
staffed
accordingly,”
he
said.
While
the
FLOW
program
has
expanded
considerably
over
the
last
two
years,
not
all
East
Coast
ports
are
in
the
database.
Out
of
the
diverted
ports,
New
York/New
Jersey
and
Savannah,
are
included.
“But
that’s
a
start,”
Castle
said.
Rail
and
truck
service
concerns
CH
Robinson
expects
rail
services
to
return
to
Baltimore
later
this
week,
but
Castle
added,
“Ocean
containers
headed
to
the
port,
primarily
from
Chicago,
will
pile
up
and
not
be
able
to
move
outbound
for
export.”
Val
Noel,
COO
at
TRAC
Intermodal,
the
largest
marine
chassis
provider
and
pool
manager
and
a
member
of
FLOW,
tells
CNBC
the
east-bound
boxes
out
of
Chicago,
either
export
loads
or
revenue
empties,
will
be
held
for
a
period
of
time
at
rail
terminals
in
Chicago.
Officials
from
the
DOT’s
Office
of
Multimodal
Freight
told
CNBC
that
FLOW
is
not
yet
capturing
export
cargo.
However,
the
booking
data
it
does
have
will
be
enable
participants
to
see
changes
in
trends
relative
to
truck
vs.
rail
bookings
coming
into
the
key
impacted
ports
receiving
the
diverted
trade.
One
of
the
biggest
concerns
among
logistics
companies
is
availability
of
chassis
for
both
truck
and
rail
to
handle
the
diverted
cargo.
Logistics
managers
have
told
CNBC
the
ports
of
Savannah,
Brunswick,
Virginia,
Charleston,
and
New
York/New
Jersey
are
expected
to
be
receiving
the
diverted
freight.
The
ports
tell
CNBC
they
can
receive
the
extra
cargo,
but
logistics
managers
are
concerned
about
the
availability
of
chassis
to
receive
the
extra
freight.
“For
our
company,
we
have
plenty
of
supply
in
Philadelphia
and
New
York/New
Jersey
to
handle
any
diverted
cargo,”
said
Val
Noel,
COO
at
TRAC
Intermodal,
the
largest
marine
chassis
provider
and
pool
manager
and
a
member
of
FLOW.
“We
don’t
supply
chassis
in
Norfolk
or
Charleston
and
these
are
Port
Chassis
Pools.”
Mike
Wilson,
CEO
of
Consolidated
Chassis
Management
(CCM)
which
is
the
sole
manager
and
chassis
provider
for
SACP
3.0.,
said:
“If
cargo
is
diverted,
it
should
also
go
to
New
York
and
Norfolk,
and
we
should
be
able
to
serve
the
ports
of
Wilmington,
Savannah
and
Jacksonville.”
“Once
the
steamship
line
(SSL)
finalizes
the
diversion
plan
to
discharge
import
volume,
the
SSL
will
redirect
the
outbound
boxes
holding
in
Chicago
to
allow
the
outbound
vessel
to
be
fully
profiled. While
there
could
be
an
initial
delay,
the
supply
chain
should
be
able
to
pivot
to
the
diverted
gateways
and
minimize
any
significant
congestion
issues,”
Noel
said.
Alan
Baer,
CEO
of
OL
USA,
tells
CNBC
he
has
containers
on
the
Dali.
“We
have
cargo
going
to
UAE,
Saudi,
Doha,
India
and
Bangladesh,”
said
Baer.
“For
our
U.S.
customers,
our
imports
are
being
diverted
to
New
York/New
Jersey
and
Virginia
(Norfolk),
cargo
for
the
Midwest
was
originally
headed
to
Norfolk. Our
Midwest
exports
we
think
will
be
sent
to
NY,
Norfolk
as
well,
plus
Montreal.”
Stephen
Edwards,
CEO
of
the
Port
of
Virginia,
said
its
operating
team
is
already
working
with
ocean
carriers
whose
vessels
were
due
to
call
Baltimore
and
offering
the
capability
to
discharge
cargoes
as
requested.
“The
Port
of
Virginia
has
a
significant
amount
of
experience
in
handling
surges
of
import
and
export
cargo
and
is
ready
to
provide
whatever
assistance
we
can
to
the
team
at
the
Port
of
Baltimore,”
Edwards
said.
