When Baltimore Bridge Collapsed, Shippers Left Waiting for Cargo Pickup

Shipping carriers declare 'force majeure' over Baltimore Harbor bridge crisis, telling U.S. logistics companies and shippers, including retailers, that once cargo is dropped off at other ports, they It is up to us to recover it.

In an alert to customers on Tuesday, CMA CGM wrote: “Those (containers) on the water will be unloaded at another port where they will be made available for collection, and CMA CGM's bill of lading will end.”

It was the first ocean carrier to declare as force majeure the provision in a contract that releases the 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 alternative port. Evergreen announced the same measure.

On the other hand, Maersk provides transport. “For goods already on the water, we will skip the port and unload goods destined for Baltimore, at neighboring ports. From these ports it will be possible to use land transportation to reach the final destination.”, Maersk said in a customer alert. However, he noted that the situation remained fluid. “We are still working through the various contingencies with our clients and will continue to provide specific and general advice to our clients as the matter progresses,” he said.

Shipping carriers Hapag Lloyd and MSC did not respond to requests for comment on their plans.

Logistics officials tell CNBC the next 36 hours will be critical for moving trade diverted from the Port of Baltimore after the deadly accident of the 10,000-container container ship Dali crashed into the Francis Scott Key Bridge in the early hours of Tuesday. .

The Dali was chartered by Maersk.

According to ImportGenius, the Dali unloaded cargo on March 24 including clothing and household items that may have been on the hijacked ships, also ranging from about 80 containers of Satsuma tangerines, about 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 number one in the United States for imports and exports of automobiles, light trucks and agricultural tractors.

The supply chains of major wood panel importers, including Lumin Forest Products, Sudati and Arauco, also rely heavily on Baltimore.

“The impact of the Baltimore Port shutdown on construction and contractor supply chains could be significant,” said William George, director of research for ImportGenius.

One problem, logistics executives say, is that shipping carriers aren't updating their ships' transits quickly enough to alert them of the new diverted port so they can schedule pickups for their customers' containers.

Paul Brashier, vice president of drayage and intermodal at ITS Logistics, told CNBC that he fields calls from customers asking where their containers are going. “They fear being charged container delay fees [detention and demurrage] if they do not remove their containers from the terminals as soon as possible.”

The urgency to recover diverted containers has increased as shipping carriers declare “force majeure” on containers bound for Baltimore once the cartons arrive at the diverted port, and companies that imported their products must find transportation to move the cargo before the containers are late. fees are charged.

“The biggest thing we're seeing through our data integrations with shipping carriers is that we're not seeing the port of unloading updated yet,” Brashier said, citing ITS Logistics' ContainerAI platform. “What we are doing now is we will have to manage container logistics through the data provided to us by the terminals. But this means we are alerted when the container has already arrived, instead of planning while the container is still en route to the terminal. port.”

Once a container arrives at a terminal, the timer begins counting the free time allocated to a container. Once this free time expires, detention and demurrage charges begin.

“We are looking to see if the terminals will grant an extension of free time or waive the fee,” Brashier said. “That’s the problem right now.”

Tracking Baltimore's Diverted Containers

To help address 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 established two years ago and has since grown to over 70 participants with over 60 additional companies waiting to be onboarded.

FLOW has partnered with retailers such as Home Depot, Nike, Walmart and Target; Union Pacific and BNSF railroads; and logistics providers CH Robinson, DHL and FedEx. Aggregating data from these holdings provides a platform where real-time data analysis can be performed on port and inland network congestion and can monitor unexpected movements of goods caused by global events, such as the ongoing accident in Baltimore Harbor.

Officials with the DOT's Office of Multimodal Freight told CNBC they have heard from FLOW member ocean carriers and shippers, and are evaluating short- and medium-term options for diverting their cargo given the collapse of the Francis Scott Key Bridge.

“Because FLOW helps us visualize real and forward-looking shipping booking data at 15, 30, 45 and 60 days, participating in this data sharing program means we could start to see industry-wide where these new bookings are gravitating toward,” Matt said. Castle, vice president of global transportation at CH Robinson, adding that all shipping reservations to and from Baltimore must be rescheduled until the port is operational again. “Before we send our customers' goods to these ports, this should help us to ensure that they have enough equipment, that they have enough appointments and that they have the necessary personnel,” did he declare.

Although the FLOW program has grown significantly over the past two years, not all East Coast ports are included in the database. Among the diverted ports, New York/New Jersey and Savannah are included.

“But it’s a start,” Castle said.

Rail and road service issues

CH Robinson expects rail service to return to Baltimore later this week, but Castle added: “Shipping containers bound for the port, mainly from Chicago, will pile up and not be able to get out for the export.”

Val Noel, COO at TRAC Intermodal, the largest marine chassis supplier and pool manager and member of FLOW, told CNBC that eastbound cartons depart from Chicago, whether loaded for export or empty , will be kept on the rail for a certain time. terminals in Chicago.

Officials with the DOT's Office of Multimodal Freight told CNBC that FLOW is not yet capturing exported goods. However, the booking data it has will allow participants to see changes in trends in relation to truck bookings versus rail bookings entering the major affected ports receiving diverted trade.

One of the biggest concerns for logistics companies is the availability of chassis for trucks and trains to handle diverted goods. Logistics officials told CNBC that the ports of Savannah, Brunswick, Virginia, Charleston and New York/New Jersey are expected to receive the diverted cargo. Ports tell CNBC they can receive the extra cargo, but logistics officials are concerned about the availability of chassis to accommodate the extra cargo.

“For our business, we have sufficient supply in Philadelphia and New York/New Jersey to process any diverted cargo,” said Val Noel, COO at TRAC Intermodal, the largest marine chassis supplier and pool manager and member of FLOW. “We don’t supply chassis to Norfolk or Charleston and those are port chassis pools.”

Mike Wilson, CEO of Consolidated Chassis Management (CCM), which is the sole chassis manager and supplier for SACP 3.0, said: “If the 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 shipping company (SSL) has finalized the diversion plan to clear the volume of imports, SSL will redirect the outbound cartons held in Chicago to allow the outbound vessel to be fully profiled. Although there may 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, told CNBC he has containers on the Dali.

“We have goods going to the United Arab Emirates, Saudi Arabia, Doha, India and Bangladesh,” Baer said. “For our US customers, our imports are diverted to New York/New Jersey and Virginia (Norfolk), freight for the Midwest was originally directed to Norfolk. We believe our Midwest exports will also be sent to New York, Norfolk , as well as in Montreal. “.

Stephen Edwards, CEO of the Port of Virginia, said his operations team already works with ocean carriers whose ships need to call in Baltimore and provides the ability to unload cargo on demand. “The Port of Virginia has extensive experience handling increases in imported and exported cargo and is prepared to provide any assistance possible to the Port of Baltimore team,” Edwards said.

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