Just days after CSX announced a new rail line in response to the Port of Baltimore closure, Baltimore-bound containers that had been diverted to the Port of New York and New Jersey are once again being unloaded in Baltimore.
“We will keep this in play for the duration of the port closure,” said Mark Schmidt, vice president and general manager of Ports America Chesapeake, one of the port operations of Ports America, the largest marine terminal operator in North America, owned of the Canada Pension Plan Investment Board. “We get visibility during our daily calls with the teams working on the wreck in the water,” he said.
CSX began discussions last week with Ports America to see how it could actually move the diverted cargo. The volume of incoming containers may be the same, but the touchpoints in handling these containers have changed. “There are established touchpoints in the supply chain in logistics, so when one is disrupted, it becomes difficult to manage exports and imports and where they come in and out,” Schmidt explained.
The route of the train moving the diverted cargo includes Chicago; Kearney, New Jersey; and Baltimore.
According to supply chain intelligence firm Project44, containers originally destined for the Port of Baltimore were diverted to the ports of Norfolk (43%), New York (26%), Wilmington (13%) and Newark-Elizabeth, New Jersey ( 10%), with another 8% diverted to other ports.
Rail is preferred by shippers, including retailers, due to cost. While rail transport is slower, trucking has a higher price. Rail transportation is also attractive to shippers who want to be greener in their transportation, generally four times more fuel efficient than trucks and emitting around 75% fewer greenhouse gases.
South Norfolk announced Wednesday that it is launching a dedicated service to facilitate the flow of rerouted cargo between the Elizabeth Marine Terminal in the Port of New York and New Jersey and the Seagirt Marine Terminal in Baltimore. The service will begin on April 5. Norfolk is in discussions with Ports America to extend this service directly to the dock at their Seagirt intermodal container transfer facility. Norfolk Southern’s Triple Crown Services network will assist in dedicated intermodal service and work with freight owners requiring door-to-door service.
As the Port of Baltimore crisis has unfolded, many major ocean carriers have invoked contractual clauses that shift responsibility for transporting cargo from rerouted ports to ocean customers.
Even though marine container ship operations are closed, land operations in the Port of Baltimore have not stopped.
“This is the result of good cooperation with the International Longshoremen’s Association, the largest maritime workers’ union in North America, and the Port of Baltimore,” Schmidt said. “Our workforce has remained the same. What we are doing on the waterfront to help keep the ILA workforce employed is to train our water staff, such as crane operators, administrative staff and some port leaders , on land skills.”
The ILA represents longshoremen at ports on the East and Gulf Coast, including the Great Lakes, major U.S. rivers, Puerto Rico and eastern Canada, and are currently in union negotiations on a contract that expires September 31 .
Scott Cowan, president of the International Longshoremen’s Association Local 333, which represents Baltimore workers, said 85 percent of his members are “day hire,” meaning they work only when the ship is in dock.
For the trucking community, it’s been business as usual, working on containers at the port, even as no new containers are being unloaded from ships. According to Schmidt, there are now fewer than 500 import containers in the yard. Normally, Ports America Chesapeake’s truck pickup container yard would hold 3,000-5,000 import containers. According to Schmidt, truck turnaround times, which measure the time it takes to enter the port, pick up a container and leave, are typically 60 minutes.
Schmidt said there is a four-week window at terminals to keep tabs on incoming containers to help make staffing decisions.
“We are monitoring the empties as they return and will divert them to the Port of New York and New Jersey,” Schmidt said. “Exports are not coming into our terminal.”
There are ten ships stuck in the Port of Baltimore, including a roll-on/roll-off vessel loaded with cars, farm equipment and trucks stuck in the port. As of now, Schmidt says unloading that RORO vessel and diverting the vehicles to another port is not on the table.
The Port of Baltimore is the nation’s largest import-export port of automobiles, farm equipment and light trucks. The port handled about $36 billion of the nation’s international vehicle trade in 2023, according to data from Dun & Bradstreet. Dun & Bradstreet estimates a vehicle-related weekly economic impact of $700 million and an overall weekly direct economic impact of the Port of Baltimore closure at approximately $1.7 billion, based on the average weekly value of goods that were processed through the port in 2023. The indirect impact from disrupting the cross-border flow of goods through the Port of Baltimore is estimated to be $6.6 billion per month.
According to Oxford Economics’ Supply Chain Stress Index – which the closure of the Port of Baltimore and other recent supply chain disruptions have prompted the company to restore – while supply chain conditions have improved since the end of the pandemic, risks are “leaning towards renewed supply chain stress as ongoing conflict in the Middle East, drought-related issues in the Panama Canal and the recent collapse of the Key Bridge in Baltimore will impact trade, inventories and inflation” .