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Submitted URL: https://url.de.m.mimecastprotect.com/s/Bt-BCpZ4J8cyQ5lgCVsf2_?domain=atsinc.com
Effective URL: https://www.atsinc.com/blog/how-port-closures-impact-domestic-international-shipping?utm_campaign=Transportation%20Tool...
Submission: On April 03 via api from US — Scanned from DE
Effective URL: https://www.atsinc.com/blog/how-port-closures-impact-domestic-international-shipping?utm_campaign=Transportation%20Tool...
Submission: On April 03 via api from US — Scanned from DE
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HOW PORT CLOSURES IMPACT DOMESTIC & INTERNATIONAL SHIPPING
On March 26, 2024, the 984-foot cargo ship M/V Dali hit a pillar of Baltimore’s
Francis Scott Key Bridge, causing its total collapse into the Patapsco River.
At Anderson Trucking Service, Inc. (ATS), our hearts go out to the victims,
their families, first responders, the people of Baltimore, and the global
shipping community as we reel from this devastating accident.
The Port of Baltimore is a major U.S. port — one of the largest in the nation
for automobile imports and exports and other roll-on/roll-off (ro/ro) cargoes.
It is also the 9th largest port in the nation for overall volume.
At this time, the Port of Baltimore is closed indefinitely to all vessel traffic
and will remain so until the Fort McHenry marine channel can be cleared for
vessel navigation.
First, some reassurance: While this incident was a tragic and unforeseen
circumstance, supply chain interruptions are not uncommon. Freight forwarders
and ocean carriers are experienced in navigating sudden disruptions.
In the immediate aftermath of the Baltimore bridge collapse, here’s what
shippers need to know:
BALTIMORE BRIDGE COLLAPSE: WHAT WE KNOW RIGHT NOW
* All vessel traffic at the Port of Baltimore is suspended indefinitely while
recovery efforts are underway.
* Trucks are still being processed at ground terminals and can access cargo
that arrived prior to the bridge collapse.
* Rail services are expected to return within days to facilitate outbound
export.
* Freight at or destined for Baltimore will still be received by an alternate
US East Coast port. Shippers do not need to pause shipments; contingency
plans are diverting cargo to other major ports along the Eastern Seaboard,
including Newark, Norfolk and Charleston, Savannah, Brunswick, and others.
* Some 30,000 cars and 3,600 trucks crossed the Francis Scott Key Bridge daily
and must now be rerouted. Shippers should allow for additional transit time
to accommodate these changes.
* Traffic congestion will be increased in and around both Baltimore and the
other East Coast cities and ports now receiving additional shipments.
* Trucks carrying hazardous materials that are not allowed in tunnels will be
diverted to a detour of approximately 30 miles around Baltimore.
* Stay in close communication with your freight forwarder or ocean carrier for
regular updates and further details as they become available.
Related: Planning Ahead: How to Be Better Prepared for Supply Chain Disruptions
In our decades of service to shippers like you, ATS has seen how the
transportation industry has successfully navigated uncertainty and disruption
following major global events.
The wars in Ukraine and Palestine, the crises at the Panama and Suez Canals, and
the COVID-19 pandemic are all recent examples of challenges faced — and overcome
— by shippers and carriers around the world.
We know that any disruption to your day-to-day operations can be concerning.
That’s why we’ve put together a guide to port closures and their effect on
domestic and international shipping.
This article will provide answers to your most immediate questions regarding the
impact of a major port closure on your shipments, including:
* What causes port closures?
* What happens to shipments during port closures?
* What to expect: Domestic shipping
* What to expect: International shipping
* What can shippers do to minimize supply chain interruptions?
By the time you’ve finished reading, you’ll be armed with the knowledge you need
to make the best decisions for your business, and the peace of mind to carry on
with confidence.
WHAT CAUSES PORT CLOSURES?
Accidents, construction, labor shortages, strikes, natural disasters, pandemics,
global conflicts — port closures can be caused by any of these factors and
others. Total closures are less common than increased port congestion, which can
be caused by a similarly broad range of factors, including:
* Lack of infrastructure
* Labor shortages or strikes
* Truck driver shortages
* Chassis shortages
* Inefficient customs processes
* Government shutdowns
* Seasonal demand
* Severe weather
* Construction
Related: Disruptions in Supply Chains Throughout History — and What It Takes to
Survive
WHAT HAPPENS TO SHIPMENTS DURING PORT CLOSURES?
When a port closes for any reason, transportation and logistics providers spring
into action to reroute shipments, keep freight flowing, and ensure the
reliability of the global supply chain.
IF A SHIPMENT IS ALREADY AT PORT
Freight forwarders will contact carriers, drayage companies, and the authority
responsible for the port in question to understand the situation and line up
options for moving cargo as soon as they are able.
As a shipper, your freight forwarder or logistics provider will be in frequent
communication with you to keep you fully informed about your freight’s status
and the impact of the closure on your timelines and costs.
IF A SHIPMENT IS IN TRANSIT
If a shipment is in transit and destined for a port that is now closed, freight
forwarders will work to reroute freight to the nearest open port that has
capacity.
Shippers should be prepared for additional time and cost on their shipments when
rerouting. Work with your transportation provider to find alternate ports and
routes that work best for your shipping schedule and budget.
IF A SHIPMENT IS STILL AT ORIGIN
If a shipment has not yet left the port of origin, freight forwarders will work
with the shipper and receiver to determine which open port is the best
alternative.
If shippers can be flexible with their timelines and port locations, they
increase their chances of finding a satisfactory contingency plan that does not
have a major impact on their business objectives.
WHAT TO EXPECT: DOMESTIC SHIPPING
When a major port closes for any reason, it can impact your domestic supply
chain in a variety of ways:
* Increased trucking and rail rates in areas affected by a new influx of
rerouted cargo to alternative ports.
* Truck capacity may be low as drivers head to different ports and get tied up
in traffic congestion and detours.
* Delayed pickups and deliveries due to increased traffic and detours.
* Higher fuel costs due to the closure’s impact on international trade.
Overall, domestic shippers can expect higher costs, longer shipping times, and
an increased need for flexibility in their route planning.
Related: How Do Domestic Supply Chain Disruptions Happen? (and How You Can Avoid
Issues)
WHAT TO EXPECT: INTERNATIONAL SHIPPING
While international shippers feel the most immediate effects of a major port
closure, they are also incredibly nimble. Shippers will reroute to other ports
to keep shipments moving, lessening the impact on their supply chain.
Still, the repercussions of a port closure can echo across international supply
chains, culminating in overall inefficiencies:
* Departure delays and cancellations. Your shipment may be rolled to the next
available departure window or canceled altogether until an alternate port can
be determined.
* Slowed processing and delays upon arrival at alternative ports due to
increased inbound shipments and related congestion.
* Higher overall shipping costs to accommodate changes in route, higher fuel
costs, delays, etc.
RELATED: How Do Global Supply Chain Disruptions Impact International Shipping?
WHAT CAN SHIPPERS DO TO MINIMIZE SUPPLY CHAIN INTERRUPTIONS?
As a shipper, your transportation provider will be your central lifeline
throughout any supply chain disruption caused by a major port closure.
Your freight forwarder will communicate regularly with you to keep you
up-to-date on contingency plans and options, potential timeline and cost
changes, and any roadblocks that develop.
The best thing you can do to minimize supply chain interruptions? Be flexible.
Flexibility with your timelines and pickup windows will facilitate a smoother
supply chain, even in the face of disruptions.
Communicate clearly and consistently with your provider about your willingness
to explore new options and to what extent. If you can offer your provider the
highest possible degree of flexibility, they’ll use that longitude to find you
the best solution for your situation.
Increases in cost and shipment time are to be expected, so plan in advance for
these additional expenses and work closely with your provider to find
cost-effective alternatives to minimize any cost impacts.
Related: Top 8 Global Freight Forwarders in 2024 (and How to Choose a Provider)
Unexpected port closures happen. Regardless of the cause — accidents, labor
strikes, natural disasters — port accessibility can change at a moment’s notice,
forcing shippers and carriers to find contingency plans for their freight.
The good news is that freight forwarders and ocean carriers are well-versed in
these types of supply chain disruptions. When a major port closes, they’ll work
non-stop to ensure freight keeps moving to alternative ports.
Like knocking over the first in a line of dominos, closing a port also impacts
ground freight transportation. Experienced providers can help shippers navigate
new routes and challenges like truck scarcity and traffic congestion.
The truth is, there’s no need for shippers to panic during a major port closure.
Solutions can and will be found, and as long as shippers remain level-headed and
open to alternatives, they’ll come out on the other side with their businesses
intact.
If you’re looking for alternate ports for your freight during a closure, check
out our list of the 10 Busiest U.S. Ports in 2024 (and How to Choose One). It
will help you understand each major port’s capacity and viability for your
specific trade routes and freight types.
Tags: International Shipping, ATS International, Supply Chain Tips, Market
Update
WRITTEN BY JAY THOMASSEN
Jay is the Vice President of Commercial Services for ATS International. Jay
advanced to his current role after more than a decade as Director of ATS
International. He has partnered with ATS since 1992 in his various roles with
both U.S. domestic and ocean transportation carriers. Jay began his
transportation career in 1986 as a commercial over-the-road Driver following his
service in the U.S. Navy.
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