Carriers are changing sea routes to the closed port
MSC apologizes for the disruption caused by this contingency plan
According to CNBC MSC has joined the list of shipping companies ending the delivery of diverted containers out of port for shipping customers as a result of the container ship accident near the port of Baltimore that led to the tragic bridge collapse.
The decision was made since the port of Baltimore is not known when it will be operational. Essentially, the company transfers the burden of receiving the cargo to another port that has diverted its routes.
MSC informed its Customers by email
In an email, the company informed its customers that containers already on board with the final destination of the Port of Baltimore will be rerouted and unloaded at the first available alternative port.
“For these shipments, the contract of carriage will be declared terminated at this alternate port and storage, D&Ds and transportation costs to the original intended destination will be for the sole cargo's account,” the company claims.< /p>
MSC went on to say that “passage to and from Baltimore is currently impossible and will not be restored for several weeks, if not months.”
The companies CMA CGM, COSCO and Evergreen were the first to announce similar moves and in some cases formally declared “force majeure,” a legal term referring to the right to waive contractual duties when events beyond a party's control occur.
< p style="text-align: justify?">From communication with its customers MSC “apologies for the disruption caused by this contingency plan, which is required in response to events beyond our control, but which is taken in accordance with the terms of the contract of carriage.”
Management companies seek alternative transportation plans
Chain management companies in the wake of the accident are making alternate transportation plans to keep up with carrier diversions, and executives told CNBC that the next few days will be critical in moving the diverted trade away from the Port of Baltimore.
< p style="text-align: justify;">The Port of Baltimore, the nation's eleventh largest port, is #1 in the US for imports and exports of automobiles/light trucks and agricultural tractors, in addition to handling clothing, household goods , building materials, electronics and appliances and products.
Among the problems, logistics executives said companies don't update their ship crossings quickly enough to alert them to the new port being diverted so they can schedule 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 rail and truck chassis companies, said they have the capacity to increase operations to meet the needs of incoming cargo.
In an effort to inform MSC has compiled a list of 23 ships arriving at ports diverted from March 28 to on April 29. Eight have an unknown port that has been diverted, 11 are heading to the New York/New Jersey port. three in Norfolk. and one in Philadelphia.
The US government mitigates the situation
Transportation Secretary Pete Buttigieg met with supply chain professionals about the crisis and how to ease 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 present. Shipping customers at the meeting included John Deere, Stellantis, Home Depot, Under Armor 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” , said Minister Buttigieg.
National Economic Adviser Lael Brainard, who was also in attendance, noted that in previous disruptions, the lack of complete information across various components of the private and public sectors hindered decision-making capabilities and responses. He cited the recent DOT FLOW initiative as a differentiator. “It has already been activated to bring the full capacity of all agencies of the federal government to make sure we are helping ocean carriers, port leaders, railroads, shippers and unions come together to assess the potential supply chain impacts and then to work together to deal with them”.
Paul Brashier, vice president of drayage and intermodal at ITS Logistics, said the biggest challenges may be faced by smaller companies that coordinate bookings themselves and may not have relationships at these diverted ports. “You want to get the diverted container out of the port as soon as possible so you don't incur handling and shipping fees. For some of these loaders they're starting from scratch,” Brashier said.
Once a container arrives at a terminal, the clock starts ticking on the free time available in a container. Once that free time is up, the handling and mailing fees start, unless the ports agree to waive them.
“We're looking to see if the terminals will either give an extension of free time or they will waive the fees” concluded the Minister.
Cyprus is not affected < /h3>
At this stage the Cypriot Economy and shipping do not seem to be affected. The fact that 90% of Cypriot imports come from Europe and the sea routes are not connected to those of Baltimore certainly plays a big role. The closure of the port of Baltimore, however, in a broader context will affect international trade and later some goods may be affected in Cyprus as well.
With sources from: CNBC, ot .gr, MSC Newsletter, Maritime Chronicles
