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Last night, the Maersk-chartered container vessel Dali collided with the Francis Scott Key Bridge in Baltimore, causing the bridge to collapse and very likely resulting in loss of life. The Dali had already offloaded import shipments at US ports and was en route back to Asia. We expect that vessel traffic to and from Baltimore port will be temporarily suspended, though the timeline is unclear. The full impacts of this disaster are not yet known, but it’s likely that nearby East Coast ports, including Norfolk, Philadelphia, New York, and others, will absorb cargo traffic from Baltimore in the short term. This sudden increase in volume may strain operations at other ports.

On the West Coast, backlogs are growing at major ports due to rail congestion. Volumes have been strong so far in 2024; the Journal of Commerce reports that year-over-year, import volume from Asia surged 18% in January and 40% in February. Ports from Vancouver to LA/Long Beach are feeling the pressure. We’ve seen delays as long as 2-3 weeks between arrival and loading onto the rail for transport to inland points. This is an issue to watch, especially with the looming port labor contract negotiations on the East and Gulf Coast. If shippers become concerned about potential delays at East and Gulf Coast ports, volumes could shift and strain West Coast operations even further.

On the Asia to US trade, rates have been falling from their pre-Lunar New Year highs. There is a wide range of spot rates in the market as carriers attempt to keep the official spot rates elevated while offering special spot deals on specific voyages. Contract negotiations are underway for the next contract year, and increases over last year’s fixed rate levels are expected.

Overall, with volumes unexpectedly strong so far this year, challenges and uncertainties abound. We’re watching for developments on Panama Canal water levels, Suez routing detours, US East/Gulf Coast labor negotiations, congestion at US West Coast ports, and impacts of this latest disruption at Baltimore, among others. We always recommend advance planning, staying close with your customer service reps, and keeping contingency plans at top of mind.

 

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Your CVI team is here to assist you through these current market challenges. Ocean freight, air freight, domestic road/rail, and Customs Compliance – count on our dedicated professionals to care for you and your supply chain. Call us and let us show you what we can do!

 

Rachel Shames

VP, Pricing & Procurement

CV International, Inc.

 

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Rachel serves as Vice President, Pricing and Procurement for CVI. Her responsibilities include vendor selection, contract management and negotiation, transportation pricing, FMC compliance, and international agent network management.

Rachel began her career in international shipping with CMA-CGM America. She joined CVI in 2011, gaining experience in various departments with a focus on inside sales and marketing for the company. In 2014, Rachel assumed the role of Manager, Transportation, working on service procurement and development of client proposals. She has served in her current position since 2018.

A native of Norfolk, Virginia, Rachel earned her bachelor’s degree from the University of Michigan in 2005. She holds a Master of Business Administration with a concentration in Maritime and Supply Chain Management from Old Dominion University.

– Rachel Shames, VP, Pricing & Procurement, CVI
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