MSC, the world's largest ocean carrier, has joined the list of ocean carriers to stop delivering containers diverted out of port for shipping customers as a result of a container ship accident near the port of Baltimore, which caused a tragic bridge collapse. . With the Port of Baltimore closed indefinitely, the decision puts the onus on the diverted port to load the cargo and ship it to its final destination.
In an email to customers obtained by CNBC on Thursday, MSC explained that for existing customer containers in waters bound for the Port of Baltimore, cargo will be diverted and discharged at an alternate port.
“For these shipments, the contract of carriage at this alternate port will be declared terminated and storage, D&Ds and travel expenses to the originally scheduled destination will be included in the single freight account,” MSC advised.
MSC added, “Passage to and from Baltimore is impossible at this time and will not be re-established for several weeks, if not months.”
CMA CGM, COSCO and Evergreen are the first carriers to announce similar moves and in some cases formally declare “force majeure,” which refers to the right to waive contractual obligations when events beyond a party's control occur.
In its customer communication, MSC said, “We apologize for the disruption caused by this contingency plan, which was required in response to events beyond our control, but was taken in accordance with the terms of the contract of carriage.”
MSC did not immediately respond to CNBC's request for comment.
Maersk is the only major carrier to tell customers it will offer transport from diverted ports.
The Maersk was chartered by the 10,000-container capacity Daly, which lost control and crashed into the Francis Scott Key Bridge early Tuesday morning.
Logistics companies have been scrambling to develop alternative transportation plans and continue carrier diversions since the accident, and executives told CNBC on Wednesday that the next few days will be critical in the movement of diverted trade from the Port of Baltimore.
The nation's eleventh largest port, the Port of Baltimore handles apparel, household goods, building materials, electronics and appliances and manufactures, and is the number 1 US importer and exporter of auto/light truck and farm tractors.
Among the unresolved issues, logistics executives cited ocean carriers not updating their shipping schedules fast enough to alert them to the new diversion port so they could schedule their customers' container pick-ups.
Major ports along the East Coast, including Savannah, Brunswick, Virginia, Charleston, and New York/New Jersey, as well as companies that provide chassis for rail and truck transportation, told CNBC they have the capacity to increase their operations. Fulfilling incoming cargo requirements.
In a series of updates, MSC sent out a list of 23 ships arriving at diverted ports from March 28-April 29. There are eight port calls, with 11 ships calling the New York/New Jersey port; three for Norfolk; and one for Philadelphia.
On Thursday, Transportation Secretary Pete Buttigieg held a meeting with supply chain experts to address the crisis and reduce congestion. The meeting includes ocean carriers CMA CGM, Maersk, MSC, Evergreen and railroads CSX and Norfolk Southern. Port of New York/New Jersey, Georgia, Baltimore, Philadelphia, Jacksonville, South Carolina and Virginia also participated. Ship customers at the meeting include John Deere, Stellandis, Home Depot, Under Armor and Volkswagen.
“We are doing a much better job of mitigating disruptions in the supply chain than we were a few years ago, thanks to increased integration in the supply chain and new initiatives to strengthen our physical and digital infrastructure,” Buttigieg said. Meeting.
National Economic Adviser Lael Brainard, who also attended, noted that in previous disruptions, a lack of complete information across various components of the private and public sectors hampered decision-making capacity and responses. He cited the recent DOT FLOW initiative as a different one. “It's already been implemented to bring the full potential of all agencies across the federal government to ensure that we're helping ocean carriers, port leaders, railroads, shippers and unions all come together to assess potential supply chain impacts. Then work together to address them.”
Paul Brashear, ITS Logistics' vice president of drayage and intermodal, said the biggest challenges may be faced by smaller companies that coordinate bookings and may not have relationships at these diverted ports. “You want to get your diverted container out of the port as quickly as possible so you don't incur any detention and demurrage fees. For some of these shippers, they're starting fresh,” Brashear said.
Once a container arrives at a terminal, the clock starts ticking on the free time allocated to a container. Once that free time expires, detention charges and demurrage charges begin unless the ports agree to waive them.
“We're looking at whether the terminals will offer free time or waive the fee,” Brashear told CNBC on Wednesday. “That's the rub right now.”
