watch
now
MSC,
the
largest
ocean
carrier
in
the
world,
has
joined
the
list
of
ocean
carriers
terminating
the
delivery
of
diverted
containers
outside
of
the
port
for
shipping
clients
as
a
result
of
the
container
ship
accident
near
the
Port
of
Baltimore
that
led
to
the
tragic
bridge
collapse.
With
the
Baltimore
port
indefinitely
closed,
the
decision
places
the
onus
of
cargo
pick
up
at
a
diverted
port
and
transport
to
its
final
destination
on
the
shipper.
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,
cargo
will
be
rerouted
and
discharged
at
an
alternate
port
where
it
will
be
made
available
for
pick-up.
“For
these
shipments,
the
contract
of
carriage
will
be
declared
terminated
at
this
alternate
port
and
storage,
D&Ds
and
on-carriage
costs
to
the
initially
intended
destination
will
be
for
the
sole
cargo’s
account,”
the
MSC
advisory
said.
MSC
added
that
“passage
to
and
from
Baltimore
is
at
this
time
impossible
and
will
not
be
reestablished
for
several
weeks
if
not
months.”
CMA
CGM,
COSCO,
and
Evergreen
were
the
first
carriers
to
announce
similar
moves
and
in
some
cases
formally
declare
“force
majeure,”
a
legal
term
which
refers
to
the
right
to
waive
contract
duties
when
events
beyond
a
party’s
control
occur.
MSC
said
in
its
customer
communication
that
it
“apologizes
for
the
disruption
caused
by
this
contingency
plan
which
is
required
in
response
to
events
beyond
our
control,
but
which
is
taken
in
compliance
with
the
terms
of
the
contract
of
carriage.”
MSC
did
not
immediately
respond
to
CNBC’s
request
for
comment.
Maersk
is
the
only
major
carrier
to
say
it
will
provide
transport
from
diverted
ports
for
customers.
Maersk
was
the
charter
of
the
Dali,
10,000-container
capacity
containership
that
lost
control
and
crashed
into
the
Francis
Scott
Key
Bridge
in
the
early
hours
of
Tuesday.
After
the
pandemic
boom
which
led
to
historic
profits,
ocean
carriers
have
been
through
a
period
of
financial
and
operational
challenges,
with
vessel
overcapacity,
declining
earnings,
and
the
Red
Sea
Houthi
attacks
and
Panama
Canal
drought
leading
to
costly
diversions
from
major
global
trade
routes.
Logistics
companies
have
been
scrambling
since
the
accident
to
make
alternate
transport
plans
and
keep
up
with
carrier
diversions,
and
executives
told
CNBC
on
Wednesday
that
the
next
few
days
will
be
critical
in
the
movement
of
the
diverted
trade
away
from
the
Port
of
Baltimore.
The
Port
of
Baltimore,
the
nation’s
eleventh-largest
port,
is
No.
1
in
the
U.S
for
auto/light
truck
and
agriculture
tractor
imports
and
exports,
in
addition
to
handling
clothing,
household
goods,
construction
materials,
electronics
and
appliances,
and
produce.
Among
the
unresolved
issues,
logistics
executives
have
cited
ocean
carriers
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.
Major
ports
up
and
down
the
East
Coast,
including
Savannah,
Brunswick,
Virginia,
Charleston,
and
New
York/New
Jersey,
as
well
as
the
companies
providing
chassis
for
rail
and
truck
transport,
have
told
CNBC
they
have
the
capacity
to
ramp
up
operations
to
meet
the
needs
of
incoming
cargo.
In
a
series
of
updates,
MSC
sent
a
list
of
23
vessels
arriving
to
the
diverted
ports
from
March
28-April
29.
Eight
have
an
unknown
diverted
port,
11
are
headed
to
the
Port
of
New
York/New
Jersey;
three
to
Norfolk;
and
one
to
Philadelphia.
On
Thursday,
Transportation
Secretary
Pete
Buttigieg
had
a
meeting
with
supply
chain
professionals
about
the
crisis
and
how
to
mitigate
any
congestion.
The
meeting
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
clients
at
the
meeting
included
John
Deere,
Stellantis,
Home
Depot,
Under
Armour,
and
Volkswagen.
“We
are
much
better
equipped
to
mitigate
supply
chain
disruptions
than
we
were
just
a
few
years
ago,
thanks
to
increased
coordination
across
the
supply
chain
and
new
efforts
to
strengthen
both
our
physical
and
digital
infrastructure,”
Buttigieg
said,
according
to
a
readout
from
the
meeting.
National
Economic
Advisor
Lael
Brainard,
who
was
also
in
attendance,
noted
that
in
previous
disruptions,
the
lack
of
complete
information
across
different
components
of
the
private
sector
and
the
public
sector
hampered
the
decision-making
capabilities
and
responses.
She
cited
the
recent
DOT
FLOW
initiative
as
a
difference
maker.
“It
has
already
been
activated
to
bring
the
full
capacity
of
all
the
agencies
in
the
federal
government
to
make
sure
that
we’re
helping
ocean
carriers,
port
leaders,
railroads,
shippers,
and
unions
to
all
come
together
to
assess
potential
supply
chain
impacts
and
then
work
together
to
address
them.”
Paul
Brashier,
vice
president
of
drayage
and
intermodal
at
ITS
Logistics,
said
the
greatest
challenges
may
be
experienced
by
smaller
companies
that
coordinate
the
bookings
themselves
and
may
not
have
relationships
at
these
diverted
ports.
“You
want
to
get
your
diverted
container
out
of
the
port
as
soon
as
possible
so
you
don’t
incur
any
detention
and
demurrage
fees.
For
some
of
these
shippers
they
are
starting
from
scratch,”
Brashier
said.
Once
a
container
arrives
at
a
terminal,
the
clock
begins
ticking
on
the
free
time
allocated
to
a
container.
Once
that
free
time
expires,
detention
and
demurrage
fees
start
unless
ports
agree
to
waive
them.
“We
are
looking
to
see
if
terminals
will
either
give
an
extension
of
free
time
or
waive
the
fees,”
Brashier
told
CNBC
on
Wednesday.
“That’s
the
rub
right
now.”
watch
now
