In the aftermath of the Baltimore bridge collision, supply chain professionals are anticipating price hikes, as indicated by a significant rise in sentiment for container price increases released by Container xChange. A rebound of freight volumes into the United States this year, coupled with the bridge incident and the ongoing challenges in the Red Sea as well as the Panama Canal, are expected to strain key U.S. ports in the short term. This is expected to lead to increased congestion, additional logistical and operational complexities, and short to mid-term price increases.
“The sharp rise in sentiment could be linked to ongoing market volatility, the perceived emergency on the US East Coast due to the Baltimore collision, and the resulting sustained pressure on the market,” says Christian Roeloffs, co-founder and CEO of Container xChange.
Key takeaways:
- The Container xChange's Container Price Sentiment Index (xCPSI) unexpectedly surged from 26 to 61 points between March 18 and March 29. This marked increase suggests that the industry is anticipating container prices to increase in the coming weeks, while the suddenness of the index’s move highlights rising uncertainty in the market.
- Industry sources indicate an anticipated increase in container prices in the upcoming days/weeks, with projections ranging from $50-100 per TEU. This information suggests that customers looking to order new build units may encounter higher unit prices compared to previous weeks. Based on these insights, it appears that the market is poised for price increases in the coming weeks.
- As of March 29, the Key Bridge Response 2024 Unified Command reported that 56 total containers loaded on the vessel contained hazardous materials, with 14 impacted.
- In the meantime, the Captain of the Port (COTP) Baltimore has established a temporary alternate channel on the northeast side of the main channel in the vicinity of the Francis Scott Key Bridge for commercially essential vessels.
- Furthermore, shippers whose routes include Baltimore are expected to face significant challenges in the coming days. One major issue is the increased shipping costs and associated expenses due to re-routing, which are expected to rise.
“In the short term, the bridge collapse will lead to localized disruptions in container availability and transportation. The incident has also led to increased delivery times and fuel costs which could indirectly impact container prices and leasing rates in the coming times,” adds Roeloffs.
