Just days after CSX announced a new rail line in response to the closure of the Port of Baltimore, Baltimore-bound containers that were diverted to the Port of New York and New Jersey are being unloaded again in Baltimore.
“We will keep this in play for the duration of the port closure,” said Mark Schmidt, vice president and general manager of Ports America Chesapeake, one of the port operations of Ports America, the largest marine terminal operator. of North America, which is owned by the Canada Pension Plan Investment Board. “We have visibility during our daily calls with crews working on the wreck on the water,” he said.
CSX began discussions last week with Ports America to see how it could move diverted goods efficiently. The volume of incoming containers may be the same, but the touchpoints when handling those containers have changed. “There are well-established touchpoints in the supply chain in logistics, so when one of them is disrupted, it becomes difficult to manage exports and imports and their inflows and outflows,” explained Schmidt.
The rail route carrying the diverted cargo includes Chicago; Kearney, New Jersey; and Baltimore.
According to supply chain intelligence firm Project44, containers originally destined for the Port of Baltimore were rerouted to the ports of Norfolk (43%), New York (26%), Wilmington (13%) and Newark-Elizabeth, New Jersey (10%), and another 8% is diverted to other ports.
Railroads are favored by shippers, including retailers, because of their cost. While rail transportation is slower, truck transportation costs more. Rail is also attractive to shippers who want to adopt greener modes of transportation, typically four times more fuel efficient than trucks and emitting about 75% fewer greenhouse gases.
Norfolk South announced Wednesday the launch of a dedicated service to facilitate the flow of diverted cargo between the Port of New York and New Jersey’s Elizabeth Marine Terminal and the Seagirt Marine Terminal in Baltimore. The service will begin on April 5. Norfolk is in discussions with Ports America to expand this direct-to-dock service at its Seagirt intermodal container transfer facility. Norfolk Southern’s Triple Crown Services network will contribute to the dedicated intermodal service and work with cargo owners who need door-to-door service.
As the Baltimore port crisis unfolded, many major ocean carriers invoked contract clauses shifting responsibility for moving goods from diverted ports to shipping customers.
Even though maritime container ship operations are closed, land operations at the Port of Baltimore have not stopped.
“This is the result of good cooperation with the International Longshore Association, the largest maritime workers union in North America, and the Port of Baltimore,” Schmidt said. “Our workforce has stayed the same. What we’re doing at the waterfront to help keep the ILA workforce employed is training our water crews, like the crane operators , clerk staff and certain dock managers, with land-based skills.”
The ILA represents longshore workers at East Coast and Gulf ports, including the Great Lakes, America’s major rivers, Puerto Rico and eastern Canada, and is currently in collective bargaining on a contract that expires on September 31.
Scott Cowan, president of the International Longshoremen’s Association Local 333, which represents Baltimore workers, said 85 percent of his members are “per diem workers,” meaning they don’t work only when a ship is docked.
For the trucking community, it’s been business as usual, working with containers at the port, even though no new containers are being unloaded from ships. According to Schmidt, there are now fewer than 500 import containers in the yard. Normally, Ports America Chesapeake’s container yard for truck pickups would hold between 3,000 and 5,000 import containers. Truck turnaround times, which measure the time it takes to enter the port, pick up a container and leave, are normal at 60 minutes, according to Schmidt.
Schmidt said there is a four-week window at terminals to stay on top of incoming containers to help make staffing decisions.
“We are monitoring empty ships as they return and will divert them to the port of New York and New Jersey,” Schmidt said. “Exports are not arriving at our terminal.”
Ten ships are stuck in Baltimore Harbor, including a ro-ro ship loaded with cars, farm equipment and trucks stuck in the port. As of now, Schmidt says there is no discussion about unloading this RORO vessel and rerouting the vehicles to another port.
The Port of Baltimore is the nation’s largest for the import and export of automobiles, agricultural equipment and light trucks. The port handled about $36 billion of the country’s international vehicle trade in 2023, according to data from Dun & Bradstreet. Dun & Bradstreet estimates the weekly vehicle-related economic impact at $700 million, and the overall weekly direct economic impact from the Baltimore port closure at approximately $1.7 billion, based on the average weekly value of goods handled by the port in 2023. The indirect impact due to the disruption of the cross-border flow of goods through the Port of Baltimore is estimated at $6.6 billion per month.
According to the Oxford Economics Supply Chain Stress Index – which the Baltimore Port closure and other recent supply chain disruptions have prompted the company to re-establish – even though supply chain conditions supply chain have improved since the end of the pandemic, risks are “oriented towards renewed tension on the supply chain, as the ongoing conflict in the Middle East, problems linked to drought at the Canal Panama and the recent collapse of the Key Bridge in Baltimore will impact trade, stocks and inflation.
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