Logistics companies scramble after bridge collapse closes Port of Baltimore until further notice

Logistics
companies
up
and
down
the
East
Coast
were
urgently
relaying
messages
back
and
forth
to
clients
Tuesday
on
the
status
of
their
imports
and
exports
after
the
Port
of
Baltimore
was
shut
down
in
response
to

the
collapse
of
the
city’s
Francis
Scott
Key
Bridge.
A
massive
rescue
effort
was
underway
Tuesday
morning.

“Our
first
priority
is
engaging
clients
to
make
plans
for
containers
that
were
originally
routed
to
Baltimore
that
will
be
discharged
at
other
ports
on
the
Eastern
Seaboard,”
explained
Paul
Brashier,
vice
president
of
drayage
and
intermodal
for
ITS
Logistics.

“These
diverted
volumes
will
impact
the
ports
of
New
York/New
Jersey,
Norfolk
and
the
Southeast
and
we
have
to
prepare
trucking
and
transload
capacity
to
get
that
freight
to
its
intended
network,”
Brashier
said.

The
10,000
container-capacity
vessel
Dali
was
on
its
way
out
of
the
Port
of
Baltimore
in
the
early
hours
Tuesday,
heading
to
Colombo,
Sri
Lanka,
when
it
collided
with
a
bridge
pillar.
At
the
time
of
the
collision,
the
vessel
had
two
pilots
from
the
Port
of
Baltimore
on
board.

“The
immediate
impact
is
with
the
cargo
on
board
and
its
accessibility.
Other
planned
shipments
through
Baltimore
will
likely
be
rerouted,
potentially
increasing
cargo
flow
to
New
York,
Norfolk,
and
nearby
ports,”
said
Goetz
Alebrand,
senior
vice
president
and
head
of
ocean
freight
for
the
Americas
at
DHL
Global
Forwarding.
“Bulk
and
car
carriers
reliant
on
Baltimore
must
assess
operations
in
the
event
of
a
prolonged
closure.”

More
than
52
million
tons
of
foreign
cargo,
worth
some
$80
billion
were
transported
out
of
the
port
last
year,
according
to
Maryland
Gov.
Wes
Moore.
The
11th
largest
port
in
the
nation,
Baltimore
served
an
average
of
207
calls
a
month
last
year,
according
to
the
shipping
journal
Lloyd’s
List.

The
Port
of
Baltimore
is
the
top
American
port
for
the
import
and
export
of
autos
and
light
trucks,
as
well
as
wheeled
farm
vehicles
and
construction
machinery.

Last
year,
the
port
handled
847,158
cars
and
light
trucks,
according
to
data
from
the
port.
It
was
the
13th
consecutive
year
that
Baltimore
led
all
U.S.
ports
in
the
import
of
cars
and
light
trucks.
Other
top
imports
include
sugar
and
gypsum.

Breaking
out
the
trade,
$23
billion
of
the
port’s
total
$55.2
billion
of
imports
in
2023
were
autos
and
light
trucks.
Around
$4.8
billion
of
the
port’s
exports
were
motor
vehicles.

 “As
Baltimore
is
less
container-centric
primarily
a
roll-on/roll-off
port,
this
disruption
should
create
possible
flatbed
and
auto
volumes
out
of
other
ports
on
the
East
Coast,”
said
D’Andrae
Larry,
head
of
intermodal
for
Uber
Freight.

Following
the
collapse,
said
Larry,
the
bridge
and
port
will
likely
be
out
of
service
for
months
forcing
shipments
to
divert
first
to
ports
in
New
York
and
New
Jersey,
followed
by
Norfolk,
Virginia.
Other
ports
would
be
Georgia
and
South
Carolina.    

“Customers
will
be
looking
for
solutions
for
their
freight
that
typically
goes
through
Maryland,
the
mid-Atlantic,
the
upper
Midwest
and
New
England,”
he
said. “There
are
less
intermodal
options
around
Baltimore,
but
shippers
can
now
turn
to
intermodal
for
inland
moves
as
an
alternative.”

Retailers
like


Home
Depot,
Bob’s
Furniture,
IKEA,
and


Amazon
are
just
some
of
the
companies
that
use
the
port
to
import
goods.
Other
top
imports
include
sugar
and
gypsum.

“This
will
have
an
impact
for
trade
all
along
the
East
Coast
and
it
will
continue
until
we
know
how
quickly”
the
port
can
reopen,
said
Richard
Meade,
editor-in-chief
of
the
shipping
journal
Lloyd’s
List.

Vessels
were
already
being
diverted to
New
York
and
down
to
Virginia
on
Tuesday,
said
Meade.
“There
will
be
dozens
of
diversions
in
the
next
week
and
hundreds
in
the
coming
months
as
long
as
Baltimore
is
shut
down.”

Matt
Castle,
VP
for
Global
Forwarding
at


C.H.
Robinson,
explained
to
CNBC
that
there
should
be
minimal
delays
for
trucks
coming
into
the
port
area
from
the
north.
“But
for
trucks
coming
into
the
area
from
the
south,
they’ll
have
to
take
the
I-95
or
I-895
tunnels
or
navigate
around
the
harbor.
That
puts
them
closer
to
metro
Baltimore
and
adds
potentially
an
hour
to
their
trips.”

“It
will
be
expensive,
but
it
is
not
a
supply
chain
story
like
the
EverGiven
(which
was
stuck
in
the
Suez
Canal)
because
ocean
carriers
will
find
alternative
routes,”
said
Meade.
“Logistically,
ocean
carriers
and
trucking
have
the
ability
to
be
pretty
adapt
and
agile.”

The
Dali
was
chartered
by


Maersk,
which
issued
a
customer
advisory
Tuesday.

“It
will
not
be
possible
to
reach
the
Helen
Delich
Bentley
port
of
Baltimore
for
the
time
being.
In
line
with
this,
we
are
omitting
Baltimore
on
all
our
services
for
the
foreseeable
future,
until
it
is
deemed
safe
for
passage
through
this
area,”
the
company
said.

“For
cargo
already
on
water,
we
will
omit
the
port,
and
will
discharge
cargo
set
for
Baltimore,
in
nearby
ports. Please
note
that
for
cargo
set
to
discharge
in
Baltimore,
delays
may
occur,
as
they
will
need
to
discharge
in
other
ports,”
the
Maersk
advisory
said.

There
could
also
be
disruptions
to
coal
supplies,
as
well
as
to
gasoline
availability
in
the
Baltimore
area,
since
some
ethanol
comes
in
by
barge
and
rail.

“Gasoline
shipped
from
Gulf
Coast
refineries
by
pipeline
is
blended
with
10%
ethanol
which
is
delivered
into
the
Baltimore
area
via
train
and
barge,”
said
Andy
Lipow,
president
of
Lipow
Oil
Associates.
“The
oil
industry
will
have
to
find
alternate
supply
routes
for
those
barge
deliveries
which
in
the
short
term
can
be
met
by
trucking
it
in
from
Philadelphia.”

Lipow
said
jet
fuel
and
diesel
fuel
supplies
would
likely
be
unaffected.
But
the
diversions
will
all
create
additional
costs
in
both
shipping
and
trucking
once
the
rerouting
is
done.

Rail
giant
CSX,
which
moves
much
of
the
coal
that
arrives
in
containers
at
the
Port
of
Baltimore,
said
Tuesday
that
customers
should
expect
potential
delays
from
the
collapse.

In
a
statement,
the
company
said
it
has
“the
capacity
to
dispatch
additional
trains
to
CSX-served
coal
terminals,
in
Baltimore
before
reaching
its
space
limits.”

But
CSX
cautioned
that,
“all
international
intermodal
shipments
destined
for
Baltimore
have
been
temporarily
suspended.
Containers
originating
from
other
locations
and
destined
for
Baltimore
are
on
hold
until
further
notice.
Domestic
intermodal
traffic
on
CSX
destined
for
local
Baltimore
remains
unaffected.”

Castle,
of
C.H.
Robinson,
said
he
expects
rail
services
to
return
later
this
week.

In
the
meantime,
“Ocean
containers
headed
to
the
port,
primarily
from
Chicago,
will
pile
up
and
not
be
able
to
move
outbound
for
export.”

“The
good
news
for
customers
with
containers
that
had
already
arrived
at
the
port
is
that
we
can
get
drivers
in
to
access
their
freight,”
said
Castle.
“Same
for
cargo
that
had
arrived
by
ship
before
the
bridge
collapse
and
was
already
loaded
onto
trains
waiting
to
move
inland.”

If
exporters
choose
not
to
wait
until
the
waterway
reopens,
they
could
face
increased
trucking
and
rail
rates
if
volumes
are
rerouted
by
truck
or
rail
to
alternate
ports
like
Norfolk,
or
New
York/New
Jersey,
said
Judah
Levine,
head
of
research
for
Freightos.

Top
exports
out
of
Baltimore
include
coal,
natural
gas,
aerospace
parts,
construction
machinery,
agricultural
components
and
soybeans.
It
is
the
second-busiest
port
for
coal
exports
after
Hampton
Roads,
Virginia,
according
to
Wolfe
Research.

“The
collapse
of
the
Baltimore
bridge
primarily
affects
coal
exports
from
CNX
and
CSX
terminals,”
said
Madeleine
Overgaard,
dry
market
data
manager
for
the
global
trade
data
platform
Kpler.
“Additionally,
gypsum
and
sugar
imports
into
the
port
of
Baltimore
will
also
be
disrupted.”

“The
alternate
ports
will
also
be
used
for
arriving
imports,”
said
Levine.
“These
should
be
able
to
handle
the
extra
volumes,
though
re-routing
could
lead
to
some
congestion
or
delays
for
importers,
potentially
impacting
freight
rates
on
the
Asia-U.S.
East
Coast
and
transatlantic
routes.”

Asia-U.S.
East
Coast
shipping
rates
are
already
elevated,
due
to
diversions
away
from
the
Red
Sea
after
months
of
Houthi
attacks
on
international
shipping
vessels.

But
they
have
fallen
from
their
peak,
as
demand
has
eased
and
carriers
have
made
adjustments
for
the
longer
voyages.
As
of
Tuesday,
transatlantic
rates
were
about
even
with
2019
levels,
around
$1,659/FEU
(40
equivalent
units).  

While
trade
is
nimble
and
will
reroute,
over
the
long
term
the
bridge
will
need
to
be
fundamentally
engineered
and
rebuilt,
and
that
will
take
years.

“It
will
be
in
excess
of
two
years,”
said
Meade,
of
Lloyd’s
List.
“There
will
be
significant
disruption
and
cost
to
this
infrastructure
project.
In
1977,
the
bridge
cost
$60
million.
Take
in
inflation
and
the
rapid
pace
to
redesign
and
build
will
increase
procurement
premiums.
This
will
be
a
very
expensive
project.”

The
Dali
is
insured
by
Britannia
Steam
Ship
Insurance,
and
operated
by
charter
vessel
company
Synergy
Group.
The
vessel
is
owned
by
Great
Ocean
Investment.

“Britannia
Steam
Ship
insurance
is
a
mutual
[protection
and
indemnity
group]
which
means
risks
are
pooled
by
the
industry,”
said
Meade.

“Britannia
will
be
liable
for
the
first
$10
million.
Collectively,
the
overspill
goes
into
the
pooling
mechanism
by
the
industry,
and
then
there’s
reinsurance,”
Meade
said.