Baltimore Bridge Collapse But Rates Stay Steady for Now

The recent collapse of the Francis Scott Key Bridge in Baltimore has caused headaches for shippers, but surprisingly, ocean freight container shipping rates haven’t budged.

Data from Xeneta, a leading ocean freight intelligence platform, reveals that average spot rates from the Far East to the US East Coast (including Baltimore) have actually dipped slightly (-1%) since the bridge incident. This brings the current cost per 40ft container (FEU) down to US$5,421. Rates have fallen even further when considering other East Coast ports like New York/New Jersey, dropping 3% in the same period.

So, why haven’t rates skyrocketed despite the disruption?
According to Xeneta Chief Analyst Peter Sand, the answer lies in rerouting. Many ships originally scheduled for Baltimore likely had New York/New Jersey on their itinerary anyway. This additional capacity at these ports has helped absorb the Baltimore cargo, preventing a rate increase.

However, Sand warns that calm seas may not last. While shippers can breathe a sigh of relief with a projected reopening timeline for Baltimore (temporary access by April-end, full capacity by May-end), potential labor disputes loom large on the horizon.

The biggest threat to smooth sailing? The expiring contract between the International Longshoremen’s Association and the United States Maritime Alliance. Negotiations for a new agreement are currently stalled, with the deadline set for September 31st, 2024.

Sand emphasizes the potential for major disruption if no agreement is reached. A labor strike on the East Coast could have far more significant consequences than the bridge collapse, leading to widespread port disruptions and almost guaranteed rate hikes. This might even force some shippers to reroute imports to the West Coast or Mexico.

In short, the Baltimore bridge collapse may not have caused a rate surge, but it’s just one piece of a larger puzzle. With looming labor negotiations, the stability of East Coast shipping rates remains uncertain.

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