Freight News, Sea

Baltimore Bridge accident – supply chain assesses the impact – updated

[ March 26, 2024   //   ]

The global freight industry is continuing to digest the likely impact of the Baltimore accident on the evening of 26 March after a 10,000teu container vessel hit the Francis Scott Key Bridge road bridge in Baltimore at about 01.30 US Eastern time (5.30GMT), causing it to completely collapse with the loss of six lives.

The vessel was operating a Maersk-MSC 2M alliance service from the US to the Far East. The veesel, the Dali, issued a distress call after it appears to suffer power issues moments before the crash.

Emily Stausbøll, Market Analyst at Xeneta – the ocean freight shipping rate benchmarking and intelligence platform, said that as well as the loss of life, the tragedy could have a major impact on operations at the Port of Baltimore and the wider global supply chain. She said: “While Baltimore is not one of the largest US East Coast ports, it still imports and exports more than one million containers each year so there is the potential for this to cause significant disruption to supply chains.

“Far East to US East Coast ocean freight services have already been impacted by drought in the Panama Canal and recent conflict in the Red Sea, which saw rates increase by 150%, so this latest incident will add to those concerns.

“It is likely other larger US East Coast ports such as neighbouring New York/New Jersey and Virginia can handle additional container imports if Baltimore is inaccessible, which may limit any impact on ocean freight shipping rates. However, there is only so much port capacity available and this will leave supply chains vulnerable to any further pressure.

“The question is how quickly ocean freight carriers can put diversions in place, particularly for vessels already en route to Baltimore or containers at the port waiting to be exported.”

Head of research at the Freightos platform, Judah Levine, pointed out that Baltimore handles more roll-on/roll-off volumes than any other US port but is less critical for container traffic.

Exporters could face increased trucking and rail rates if volumes are rerouted to alternate ports like Norfolk, or New York/New Jersey, if they choose not to wait until the waterway reopens.

The alternative ports 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-US East Coast and transatlantic routes. 

Patrick Lepperhoff, principal at INVERTO, part of Boston Consulting Group: pointed out that the port of Baltimore is important for the import and export of cars and agricultural vehicles as well as machinery and aircraft parts.

The major German car manufacturers operate their own terminals there, although only the Mercedes-Benz terminal is blocked by the collapsed bridge, while the Volkswagen and BMW terminals can still be accessed.

Major American retail and DIY chains also have large warehouses on the port site and their goods are distributed throughout the US.

However, he predicted: “The blockade of the Port of Baltimore will have little impact on trade between the US and Europe. In the last quarter of 2023, around 260,000 standard containers were loaded and unloaded at the port. This volume can be diverted to the neighbouring ports, for example, New York and Norfolk.”

On 2 April, visibility specialist FourKites said that 92 vessels and more than 2,000 loads had current or upcoming voyages in or out of the Port of Baltimore. Of the 2,000 loads impacted, more than 1,400 will need to be rerouted and, of some 600 that have already been rerouted, Savannah and Norfolk were the main alternatives used so far.

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