Baltimore port closure seen likely disrupting supply chains
Fears have been raised of significant disruption to global supply chains after a container ship crashed into a bridge in the US port city of Baltimore. The ship, named Dali, hit a support column of the Francis Scott Key Bridge in the early hours of March 26, 2024, causing it to collapse. It was leaving the Port of Baltimore which is a key facility on the US East Coast and in the country. It is the busiest US port for car shipments, handling more than 750,000 vehicles in 2023, according to data from the Maryland Port Administration. It is also an important coal cargo hub. Ship traffic entering and leaving the port has now been suspended indefinitely. Bridge debris has to be first cleared from the water, for which no timeline has been given as yet. This will result in rerouting of vessels and cargo to other ports, potentially causing congestion and delays for importers, according to reports.
Baltimore exported about 20.3 million short tons of coal in 2023, up from 14.3 million short tons during the same period in 2022. About 13.3 million short tons of exports from Baltimore during the first nine months of 2023 were steam coal and 7.0 million short tons were metallurgical coal. Baltimore port also exports smaller amounts of other metals and minerals. Some other top export commodities by weight were liquefied natural gas (LNG), waste paper, ferrous scrap and automobiles/light trucks, according to Maryland government data. It is also the largest US port by volume for handling farm and construction machinery, as well as agricultural products.
Following the incident, Danish shipping giant Maersk, which had reportedly chartered the vessel, said it would be omitting Baltimore on all its services for the foreseeable future. Several rail and coal companies have also warned their customers of disruption to coal exports.
Likely impact
The Singapore-flagged Dali, which can carry just under 10,000 TEU, was operating on a 2M alliance service between Baltimore and the Far East, according to a report by Xeneta.
Emily Stausbøll, Xeneta Market Analyst, said: “This is a tragic and extremely serious mass casualty event and our thoughts are with all those people involved.
“The immediate focus is the rescue operation, but there will clearly be a highly-complex recovery phase and investigation to follow and we don’t know what impact this will have on operations at the Port of Baltimore.
“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.”
US Secretary of Transportation Pete Buttigieg said there was no question that this will be a major and protracted impact on supply chains, the reports added.
Source: Exim News Service: Baltimore (US), March 27