Update on the Port of Baltimore
In the days since the March 26th collapse of the Francis Scott Key Bridge in Baltimore, questions about plans to reopen the channel to commercial traffic have been on the minds of many in the shipping industry.
We may finally have some light on the long-term response. A joint effort between multiple government entities such as the Army Corps of Engineers and U.S. Coast Guard began cleanup efforts over the weekend.
Specifically, this cleanup effort is to help open a temporary channel for access to the majority of the port, which is still stuck behind the collapsed bridge, while the larger repair and debris removal effort is underway. Estimates on how long this cleanup effort will need are still taking shape, but crews are working 24/7 to re-open the channel safely.
Elsewhere, the containerized freight that was headed to Baltimore as of April 1 is being redirected to either Norfolk, VA, New York or New Jersey for unloading. It is still unclear at this time where bulk containers are being re-directed for offloading and re-loading.
One important note to consider, specifically for the hospitality industry, is that the Port of Baltimore does handle container freight. However, the vast majority of the regular import/export traffic is in vehicles and bulk freight (such as ore, forestry products, grain, etc.), rather than containerized goods.
Containerized product for hotel projects typically delivers to other regional ports, so this partial port closure has had minimal impact on this sector. Should you have any questions regarding your specific project, please reach out to your Audit representative directly.
International Container Shipping Rates Starting to Fall
As we had reported in late February, global container freight rates had remained elevated, but there was early data to support that we had seen the peak of the 2024 increases. As predicted, recent data pulled from FreightOS supports that in late February we had seen a plateau in the rate market, and we are seeing now the data to support a significant reduction of global cargo rates in recent weeks.
The U.S. West Coast port has seen about a 20% reduction in rates since late February, while the East Coast has seen about a 17% reduction in rates since over the same time period.
While the cost relief is welcomed, the present average ocean rates are still not back to the what we were seeing with the extremely low rates in fall of 2023. However this does provide some relief to shippers as we look forward to the summer shipping season.
It is still unclear at this time, what if any impact the collapse of the Scott Key Bridge will have on the freight rate to the East Coast, but it is unlikely to significantly impact containerized freight prices due to the Baltimore port handling more bulk freight than containerized freight.
For more information, please see our April 2024 Ports review.