In the wake of the sudden and profoundly tragic collapse of the Francis Scott Key Bridge in Baltimore, logistics teams that regularly use the Port of Baltimore are figuring out their next best options for rerouting shipments. This catastrophe will have long-term impacts on operations and strategy for shippers across the U.S., as hundreds of millions of dollars have historically moved through the port each day, and bridge cleanup and rebuilding are forecasted to take years.
Teams that regularly route shipments through the Port of Baltimore have already had to make rapid adjustments to operations to account for this disruption. As the dust settles, logistics teams must continue to revisit their strategies to maintain an adaptive approach and minimize spend.
Uber Freight’s Head of Intermodal D’Andrae Larry and Vice President of International Operations Mollie LeBlanc shared critical insights into how shippers can address the bridge collapse.
Divert shipments strategically
According to Larry, shipments which have historically gone through the Port of Baltimore to reach the Mid-Atlantic, Upper Midwest, and Northeast regions will likely be forced to divert first to other East Coast ports. Specifically, ports in New York, New Jersey, South Carolina, Georgia, and Norfolk, Virginia.
Since Baltimore is heavily a roll-on/roll-off port, other ports on the East Coast will likely see an especially high volume of flatbed and auto shipments. Be sure to update routing guides accordingly, and identify the alternative routes and modes that are within budget but have the least amount of impact on delivery performance.
“As the situation continues to develop, up-to-the-minute market information will be a critical asset to shippers looking to minimize wasted costs and time,” said LeBlanc.
The immediate impact of the Port of Baltimore crisis is increased demand at alternative ports, which may cause spot market prices for over-the-road (OTR) shipments to see a temporary uptick. However, volumes in these areas may be limited. While Baltimore offers limited intermodal options, inland moves from alternative ports can take advantage of intermodal availability to mitigate delays.
Revisit maritime law and insurance policies
LeBlanc shared that this incident is an important reminder that compliance and insurance should be top of mind for all shippers. Logistics teams should familiarize themselves with the laws and regulations under which their shipments are governed, so they can take appropriate action in urgent situations.
For instance, it is widely expected that the owners of the Dali, the cargo vessel that struck the bridge, will declare General Average, an important concept for all ocean shippers to understand. General Average is a maritime law that spreads liability for accidents among stakeholders, meaning that those responsible for the freight on board the ship may incur high costs following the incident.
“This liability will be distributed among buyers and sellers following the International Commercial Terms, or incoterms, negotiated during the procurement cycle,” said LeBlanc. “Depending on how those terms were negotiated, this accident may become an unbearable cost for foreign buyers.”
For these parties, the right insurance coverage could be invaluable. Reach out to an insurance underwriter or transportation partner to ensure that shipments retain critical insurance coverage during any deviations or diversions.
Build contingency plans and improve data visibility
The last few years have proven that supply chain disruptions of one kind or another are inevitable, and can occur at any minute. A case like the Francis Scott Key Bridge collapse may seem unprecedented but, in fact, many U.S. bridges are vulnerable to cargo ship collisions. To prepare for disruptive supply chain events as best as possible, logistics teams must have a business continuity and contingency plan in place. Developing a proactive plan, and tailoring this plan to regional and seasonal needs, can ensure teams are able to adapt when disaster strikes.
One key way logistics can maintain a proactive approach is by gaining granular visibility into shipment status and location, which enables them to make real-time decisions such as route optimization and downgrading or upgrading service to mitigate delays. Access to logistics management tools that make transportation data easily accessible and transparent is valuable to help create resiliency and minimize spend amid uncertain and dynamic conditions, particularly for long-distance or international shipments.
To better navigate future supply chain disruption, arm yourself today with dynamic, proactive transportation management strategies.
