Francis Scott Key Bridge Collapse

How supply chains are being impacted

After the collapse of the Francis Scott Key Bridge on 26 March 2024, the port had to stop all shipping activities immediately after the incident, causing a loss of $9 million per day in maritime traffic. This interruption is expected to have long-term consequences, affecting supply chains and causing economic losses for the city and state.  

The Port of Baltimore is crucial for U.S. international trade, handling around 50 million tonnes of goods annually. Although smaller compared to other ports, it plays a vital role in processing various products like automobiles, heavy machinery, coal, and sugar imports.

In the short term, the closure of the port will impact thousands of workers and businesses dependent on it. Delays in package processing and deliveries are expected, but the situation should normalise within days or weeks as ships are rerouted to other terminals.

The long-term impact could lead to more freight being redirected to West Coast ports, benefiting trucking and rail companies. However, compared to other supply chain disruptions like Red Sea attacks or the COVID-19 pandemic, the fallout from the bridge collapse is expected to be temporary.

While this incident highlights the need for safety measures, the risk of ships striking bridges remains low. Public pressure may push companies to prevent such accidents in the future.

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Red Sea Updates

UN Suspends Salvage Efforts Amid Escalating Attacks on Ships

Efforts to clean up two cargo ships - one sunk after a missile attack, and another abandoned following a fiery assault - are on hold. The United Nations' maritime shipping regulatory agency says they can't do much until attacks on ships in the area calm down.

The UK-owned Rubymar sank last month after being hit by a missile from Houthi rebels. It's sitting in shallow waters between Yemen and Eritrea with 21,000 tons of fertilizer onboard. The Greek-owned True Confidence was set on fire in an attack near Yemen's port of Aden, and it had to be abandoned.

Salvage operations, like fixing up ships and cleaning up spills, are crucial to protect marine life and coastlines. The sinking of Rubymar caused an 18-mile oil slick, and scientists worry about fertilizer leaking into the Red Sea, which could harm coral reefs and fish.

The head of the UN's International Maritime Organization, Arsenio Dominguez, says it's hard to help in unsafe areas. The Houthi rebels have been attacking ships, disrupting trade through the Suez Canal and forcing ships to take longer routes around Africa.

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Ocean Import Updates

Ocean carriers expected to struggle with oversupply

In February, almost 200,000 large shipping containers were added to the global shipping fleet. This came after a huge number of 300,000 containers were added the previous month. These new ships are being used to reroute traffic around Africa's Red Sea because it's safer than going through the Suez Canal.

But once it's safe to use the Suez Canal again, experts think that there will be too many ships for the amount of cargo that needs to be transported. They're already expecting to get another 2.5 million containers worth of ships this year, which will only make the problem worse.

Experts say that all the new ships added in the last five months are already being used, and there's still a need for more. Shipping companies are trying to find more ships to use by looking for ones they can rent from other companies.

Ship brokers, who help companies find ships to rent, say that there's a high demand for ships, especially newer, eco-friendly ones.

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Efforts to strengthen supply chains and reduce dependence on China

Western governments are working to make supply chains stronger because they don't want to rely too much on China. The UK wants to add a logistics minister to the government to help with this, and in the US, they're creating a Supply Chain Council and changing shipping laws.

In the UK, the government has launched a strategy to make sure the UK is a safe and reliable place to do business. Some UK trade groups want the government to have a logistics minister to help with issues like improving roads, training workers, and reducing pollution.

They think this will help businesses grow and make the economy stronger.

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Delays and challenges at South Africa's ports

Despite recent improvements in container throughput, delays at South Africa's ports are worsening due to crane breakdowns and adverse weather conditions. The country has been facing a logistics crisis for years, mainly due to insufficient government investment in infrastructure for ports, railways, and roads, making them vulnerable to disruptions.

Recently, the South African Association of Freight Forwarders (SAAFF) reported an increase in container handling at ports, indicating a potential turnaround in port operations. However, caution is advised as some indicators suggest ongoing challenges.

SAAFF expressed concerns about the number of ships waiting at anchor off Durban, the ratio of containers waiting to be unloaded, and ongoing equipment shortages and breakdowns. Maersk informed customers of longer wait times at Durban Pier 1, extending to five days, and productivity issues at Durban Pier 2, resulting in delays of 22-28 days. Cape Town terminals are also experiencing delays of up to five days, mainly due to strong winds.

Transnet is struggling with the Unions, as workers have been on strike, resulting in no stevedores showing up to work resulting in Cape Town port coming to a standstill most often than not.

To address these challenges, Transnet released a "wind recovery plan" for Cape Town terminals and proposed reforms for its rail freight network, including establishing agreements between Transnet and private rail freight operators. Maersk assured customers of minimising delays through network actions and contingencies, ensuring timely arrivals at destinations.  

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Maersk and MSC exploring ‍new shipping routes

Maersk and MSC are looking at new ways to run their ships on routes between the East and West. They have an agreement called the 2M Alliance, but it's ending in 10 months.

Maersk has to think carefully about its decision because it's teaming up with another company, Hapag-Lloyd, next year. MSC doesn't have such agreements, so its routes will probably stay the same.

More goods were shipped to the US in February, and it got a bit easier to go through the Panama Canal. This, along with high prices for last-minute shipping, made Maersk decide to start a service called TP20 travelling from China to the US east coast.

In February, there was a big increase in the number of goods coming into the top-ten US ports. But February is a weird month for counting because of the Chinese New Year and leap years. So, it's hard to tell if this increase is just a one-time thing or a long-term trend.

The analysis also showed that more goods are now being sent to ports on the US west coast compared to last year. This might be why Maersk decided to start its TP20 service again. There are also other reasons, like problems in the Red Sea and talks about workers' contracts on the US east coast.

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Air Freight Updates

Air cargo congestion concerns in India

Major international airports in Delhi and Mumbai are experiencing significant cargo backlogs, causing concern among exporters. This congestion is mainly due to a surge in cargo volumes and diversions from ocean trade routes, compounded by traditional peak seasons for air cargo in March and April.

As a result of this increased demand, carriers have been forced to raise rates significantly, particularly on routes to Europe and the US. This congestion has led to longer transit times, with average delays of nine days to the US and five to six days to the EU.

The shift towards air cargo from ocean transport to overcome supply chain challenges has further exacerbated the congestion. This underscores the need for better predictive capabilities within cargo systems to anticipate delays and demand shifts.

One significant factor contributing to congestion at Delhi Airport is the influx of ready-made garments from Bangladesh for transshipment, prompting Indian apparel exporters to urge the government to reconsider cross-border logistics arrangements.

Despite these challenges, overall Indian exports have shown resilience, growing by 12% year on year last month, driven by strong performance from exporters. Similar trends in air cargo are observed in Dubai and South Africa, indicating a global surge in demand for air freight.

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E-commerce growth driving air cargo expansion

Currently, one out of every five shipped items are bought online, and this is expected to increase to one in three by 2027. This surge in demand poses operational challenges but also presents substantial growth opportunities for air cargo.

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China also sees increase in air demand

India is not the only trade lane that has seen a high demand. China is also seeing a surge in air freight demand, creating an adverse effect on space availability and impacted freight rates. This is due to demand to Middle East/EU as a result of the Red Sea crisis.

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Customs Updates

Border Target Operating Model (BTOM) Changes from 30 April 2024

From January 2024 anyone exporting meat and dairy products to the UK will have needed to find a vet in the country of origin to fill out a seven-page form giving assurances that the product is disease-free. For plant products the same assurances will be needed but from a plant health inspector.

Low-risk products, which include some fruit and vegetables such as cucumber and asparagus, processed meats, and cheese made from pasteurised milk, will be exempt from extensive documentation.

What are the next stages?

The most significant change will come on 30 April, when the government begins physical checks at the border on medium-risk and high-risk goods coming into the country.

These checks will take place at specially designated border control posts. Many of these control posts are extensions of existing facilities, which check plant and animal goods coming in from non-EU countries. However, some have been established specifically for these changes. This includes a new £147m facility at Sevington, near Dover, which will process all the products coming through the UK’s busiest port.

The final major change will come in October, with the government requiring safety and security declarations for medium- and high-risk imports, while also introducing a single trade window, which the government says will reduce the number of forms needed for importers.

As of yet, goods coming from the island of Ireland will not require physical checks but the government has said these will be introduced at some point after 31 October this year.

Get in touch with our Customs Solutions team for expert advice and guidance on all processes.

Contact our Customs Solutions team today.

Our expertise allows us to provide tailored solutions that address the complexities of the market. As shipping companies show signs of flexibility in contract allocation coverage and equipment release, our team can navigate these changes effectively, ensuring smooth operations for our clients. Our strategic approach includes offering guidance that allows businesses to plan and adjust their logistics strategies accordingly.