Container traders expect chaos and higher container prices after Baltimore bridge crash
- U.S. ports are bracing for increased traffic as cargo volumes increase.
- The xCPSI rose significantly from 26 points to 61 points in one week, and most supply chain experts surveyed expect container prices to rise in the coming weeks.
- US container traders brace for potential disruption, higher container prices and increased market demand
Supply chain experts are predicting higher prices, as evidenced by the strong sentiment against container price hikes in the wake of the Baltimore Bridge crash. As cargo volumes to the U.S. recover this year, the bridge disaster and ongoing challenges in the Red Sea and Panama Canals are expected to put stress on major U.S. ports in the short term. This is expected to increase congestion, increase logistics and operational complexity, and increase prices in the short to medium term.
Container xChange’s Container Price Sentiment Index (xCPSI) unexpectedly jumped from 26 points to 61 points between March 18, 2024 and March 29, 2024. This notable increase suggests that the industry expects container prices to rise in the coming weeks. The index’s movements highlight the growing uncertainty in the market.
“The sharp rise in sentiment may be related to continued market volatility, the perceived state of emergency on the US East Coast due to the Baltimore collision, and the resulting continued pressure on the market.” Christian Roeloffs, co-founder and CEO of Container xChange, said:
We have received feedback from industry stakeholders that container prices are expected to increase in the coming days/weeks, ranging from USD 50 to USD 100 per TEU. This information suggests that customers looking to order new build units may see higher unit prices compared to the previous week. A manufacturer we used as a source in a previous report anonymously shared this insight.
Additionally, another customer from Europe, who wishes to remain anonymous, is stocking up on various types of units in anticipation of future price increases.
Based on these insights, the market appears to be bracing for price increases in the coming weeks.
Latest information on the Baltimore incident
As of March 29, 2024, Key Bridge Response 2024 Unified Command* reported that a total of 56 containers on board the ship contained hazardous materials, of which 14 were affected. Her 14 containers were evaluated by an industrial hygienist for potential hazards. The Joint Command and Joint Information Center was established in Baltimore on March 26, 2024, to coordinate the response and disseminate information regarding the Francis Scott Key Bridge collapse.
Meanwhile, Captain of the Port (COTP) the City of Baltimore is planning to build a bridge on the northeast side of the main waterway near the Francis Scott Key Bridge for commercially essential vessels, according to an official statement from Mayor Brandon M. A temporary alternative waterway has been installed.Scott, Sunday the 31stcent March 2024.
The temporary waterway will be equipped with government illuminated navigational aids and will have a control depth of 11 feet, horizontal clearance of 264 feet, and vertical clearance of 96 feet. Unified forces are working to establish a second temporary replacement waterway on the southwest side of the main waterway. This second route of his will allow passage of deeper draft vessels, with expected draft limits of 15 to 16 feet.
Container ships must adjust their routes to take advantage of this temporary channel, which has specific dimensions and markings to ensure safe navigation. This temporary solution will allow commercially essential vessels, including container ships, to continue operating with minimal disruption despite the bridge collapse.
Shippers need to prepare for rising costs and increased liability.
Additionally, shippers serving routes through Baltimore are expected to face significant challenges in the coming days. One of the major issues is the increase in shipping costs and associated expenses associated with rerouting, and is expected to continue to increase. Additionally, as MSC and several other shipping companies have informed their customers, the responsibility for picking up cargo at the converted ports has been transferred to shippers. This change requires shippers to work closely with carriers, trucking companies, and other logistics providers to safely and efficiently transport cargo to its final destination.
“In the short term, the bridge collapse will cause localized disruption to container availability and transportation. This incident will also lead to increased delivery times and fuel costs, leading to future container prices and lease rates.” may indirectly impact the Rolofus.
Are U.S. ports under pressure?
Container xChange’s analysis of loaded import volumes at the top 10 U.S. ports reveals a significant increase in container throughput compared to the previous year. This shows that port utilization is improving and suggests a strong start to the year in terms of cargo demand and activity.
Ports such as the Port of Long Beach in Los Angeles and the Port of Vancouver have seen significant increases in loaded incoming TEUs, indicating significant growth in ocean freight traffic.
It remains to be seen how well these diversions will allow the port to cope with increased traffic. As more cargo is diverted to these ports, we will see an increase in throughput pressure on these ports. This could lead to increased congestion at ports and longer waiting times for ships, trucks and trains.
Considering this situation, Container prices at these ports are expected to rise from April onwards. It depends on the extent of the appropriation and its aftermath.
The aftermath of the Baltimore crash is spreading across the country. New York Governor Kathy Hochul and New Jersey Governor Phil Murphy gave the port direction on Thursday.th Expected to accept additional cargo in March 2024 to relieve supply chain pressure from the Baltimore closure. The only waterway in and out of the port will be closed for at least several weeks, and possibly months.
“By February 2024, most U.S. ports had resumed cargo imports compared to the same period last year (January-February 2023 volumes). Although improvements have been made, concerns remain due to the ongoing Red Sea crisis and the recent Baltimore Bridge collision, which is expected to cause months of disruption. Pressure could increase and shippers and carriers may consider pivoting to the West Coast entirely, potentially causing further challenges and carrier closures.” Christian Roelofs is the co-founder and CEO of Container xChange, an online global container logistics platform.
“As we move forward, we look forward to: Increased wait times and fees At ports where traffic within the United States is diverted. Nevertheless, the most notable effects are Baltimore Regional Supply ChainThe impact on lives, the economy, and business is serious. ” Rolofus He emphasized.