The major news story affecting supply chains this month is the impact of the collapse of the Francis Scott Key Bridge in Baltimore. After three weeks of round-the-clock efforts, the container ship Dali is still several weeks from being able to be moved from the pier, impacting the port's re-opening. The need to carefully remove the containers from the ship adds additional complexity.
The port of Baltimore is the largest hub for autos and other rolling equipment in the U.S., but in terms of overall tonnage, it is only the 12th largest port in the U.S. Pricing impacts have been minimal for containers going to the East Coast with the latest rates down 1% since the incident. CSX started operations for container diversions on April 4th, adding a route from New York to Baltimore to deliver containers. The roll-on/roll-off market for autos and other large equipment is still in flux as shippers re-route shipments to nearby ports of Wilmington and Brunswick.
Overall, the global freight industry remains favorable for shippers, as supply imbalances continue to exert downward pressure on rates, leading to periodic distress for carriers and some recent market exits.
Meanwhile, international and domestic disruptions continue to necessitate adopting flexible shipping strategies. Internationally, we still have vessel diversions due to the Red Sea attacks, which have caused delays and equipment shortages on major trade lanes. Click here to access this month's update.
Highlights from this month's update include:
- Nearshoring, particularly the China+1 strategy, highlights trade routes from/to Mexico, India, and Vietnam for North American and European cargo
- Baltimore bridge collapse brings supply chain disruptions to various sectors in the United States
- Ocean rates are normalizing from the Red Sea crisis-induced peak
- Over-the-road carriers face increased pricing pressure as overcapacity persists in the trucking market
- Air demand rose in March, driven by Middle East and South Asia traffic shifting modes to avoid Red Sea-related delays
- Parcel carriers added new ZIP codes for delivery surcharges to boost profitability amid soft demand
- Warehousing rates and vacancy stabilize amidst reduced demand and recessionary concerns
This month, we are also highlighting expert commentary from our Retail Practice, with insights on the challenges luxury brands face in managing brand value while being mindful of waste.
And if you work in the Consumer Products industry, be sure to check out this month's Consumer Products Corner for an overview of key industry supply chain stats.
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