LOGISTICS: No impact yet on shipping rates after Baltimore bridge collapse; Asia-US container rates fall further

Adam Yanelli

29-Mar-2024

HOUSTON (ICIS)–The collapse of the Francis Scott Key Bridge in Baltimore is wreaking havoc on logistics and freight movements in the immediate region, but the incident has yet to have any impact on shipping rates, and costs for shipping containers from Asia to the US continue to fall, highlighting this week’s logistics roundup.

PORT OF BALTIMORE
The Port of Baltimore remains closed to all vessel traffic following the bridge collapse early Tuesday morning.

The unified command (UC) said on-scene crews continue to assess and monitor for spilled oils and hazardous substances to prevent further discharge or release into the marine environment as 14 containers on the Dali that were holding hazardous materials were impacted during the collision.

The chemical components assessed were soap products, perfume products, or not otherwise specified resins, the UC said.

Salvage efforts have begun but will take some time and according to the local US Coast Guard authorities the port is officially closed for the near future.

Some of the chemical products most likely impacted are caustic soda, veg oil, base oils, ethanol, biodiesel and a variety of others.

South African producer Sasol told ICIS that a terminal inside the port with the company’s name has not been used by the company since it opened its major facility in Lake Charles, Louisiana.

Specialty chemical producer WR Grace has a terminal in the port, according to a map of the port on the Maryland state government’s website. The company did not immediately respond on Friday to questions about the terminal.

The port is one of the largest in the US for auto imports and exports.

Global shipping major MSC is advising customers that passage to and from the port will not be established “for weeks if not months”.

Containers already on the water will be rerouted and discharged at an alternate port where they will be made available for pick-up upon completion of the usual import documentary procedure, MSC said.

Customers with containers at the origin, whether gated in or booked but not yet gated, need to contact the origin booking office immediately to decide whether they wish for the cargo to be carried to the alternate ports in the US.

Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said more vessels arriving at alternative ports, or longer port calls as vessels offload more containers, could cause some congestion at those ports, meaning delays for shippers.

“But ocean freight is now in its slow season between Lunar New Year and peak season that typically starts in June or July,” Levine said. “And at the moment there is no significant congestion at any of the major East Coast ports.”

CONTAINER RATES FALL FURTHER
Average global rates for shipping containers continue to fall after surging in December when Houthi rebels began attacks on commercial vessels in the Red Sea.

Shippers began to divert away from the Suez Canal because of the attacks, which added days and sometimes weeks to traditional trade routes and tightened available capacity.

Shippers brought all floating capacity online, increased sailing speeds and brought into service newbuilds to help alleviate the situation.

Softer overall demand also helped ease stressed supply chains.

Average rates and rates from Shanghai to the US and Europe have fallen steadily since the first of the year according to supply chain advisors Drewry and as shown in the following charts.

Levine said the Baltimore closure could put some upward pressure on rates but that he expects it would be temporary.

Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets.

They also transport liquid chemicals in isotanks.

LIQUID TANKER RATES STEADY
While many tanker shipping routes from the Americas remained subdued with no significant price changes, the Transatlantic eastbound route remains firm as there continues to be a lot of interest seen in the market this week, although space remains tight.

On the bunker side, fuel prices have been steadily decreasing as well on the back of softer energy prices; however, week over week remain relatively mixed.

PANAMA CANAL
Wait times for non-booked vessels ready for transit edged higher this week, according to the PCA’s vessel tracker and as shown in the following image.

Wait times last week were 1.2 days for northbound traffic and 1.4 days for southbound traffic.

Additional reporting by Kevin Callahan

Thumbnail image shows the Dali and the collapsed Francis Scott Key Bridge in Baltimore, Maryland, from www.keybridgeresponse2024.com

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