INDUSTRIAL JENGA: THE BATTLE TO REOPEN BALTIMORE PORT
The port of Baltimore could be up and running at full capacity by the end of next month under a tentative timetable released yesterday by the US Army Corps of Engineers (USACE), a plan which also sees another shipping channel open later this month. The port has been largely closed for the last 11 days after the city’s largest bridge was destroyed following a box ship allision, an accident that killed six road maintenance workers. Salvage teams have managed to open two shallow shipping channels this week. The delicate operation to remove the bridge, and the badly damaged 9,962 teu Dali containership, was compared by officials to a game of Jenga yesterday. The Dali blocks only a portion of the main shipping channel on one side. The channel is wide enough for two ships to pass, if debris is removed from the far side, Pinchasin said. Federal officials are set to release preliminary findings from their accident investigation within days, according to a new report from Bloomberg. The National Transportation Safety Board (NTSB) recovered a voyager data recorder last week, which showed power failed for just one minute and three seconds as it approached the giant bridge, and that the lead pilot tried to swing the 300 m long vessel clear of a collision by dropping its port anchor to pivot it away.
MSC FACES $63M PENALTY IN US REGULATORY DISPUTE
Mediterranean Shipping Co (MSC) is looking at a potential $63m fine in the US for alleged violations of the Shipping Act, encompassing thousands of contested charges directed at various clients. The US Federal Maritime Commission’s (FMC) Bureau of Enforcement, Investigations, and Compliance has accused the world’s largest liner of charging excessive late fees on non-operating reefers and billing companies that were not originally part of the contractual agreement. More specifically, MSC reportedly developed and employed unlawful practices targeting US logistic chain service providers such as non-vessel operating common carriers, ocean freight forwarders, customs brokers, and truckers. “The fact that MSC failed to conduct an internal audit and proactively reconcile its billing processes, resulting in at least 2,629 reefer overcharges and 1,704 undisputed reefer charges, is a clear display of MSC’s reckless disregard and plain indifference to the requirements of the Shipping Act. Thus, these 2,629 reefer overcharges were either a deliberate act in flagrant contravention of the Shipping Act or a grossly negligent accounting error that MSC should have been aware of and more proactive in resolving,” FMC attorneys said.
WASHINGTON SEEKS NEW WAYS TO DEESCALATE RED SEA SHIPPING CRISIS
The US is trying a new carrot-and-stick approach in its dealings with the Houthis in Yemen. On the one hand, the US military is claiming its attacks on Houthi installations are working, reducing the group’s capabilities to attack merchant ships in the Red Sea and the Gulf of Aden lately. Meanwhile, the American diplomatic line is that Washington could rescind its terrorist tag on the Houthis if they agree to stop attacking ships passing by its shores. The Houthis – backed by Iranian intelligence and hardware – have attacked around 70 commercial ships in the near six months since Israel went to war with Hamas, leading to a mass exodus of vessel traffic in the region. Over the past 10 days, however, attacks have eased up. Lieutenant General Alexus Grynkewich, the top US Air Force commander for the Middle East, ascribed this new quieter phase in the Red Sea shipping crisis as likely down to all the strikes carried out by US and UK armed forces in recent weeks, taking out much of the Houthis’ arsenal of drones and missiles.
POSTAL SERVICE’S AIR CARGO SHIFT TO UPS MAKES EVERYONE A WINNER
The U.S. Postal Service’s decision this week not to renew a contract with FedEx, worth more than $1.5 billion per year, for domestic air transport and award it to UPS after more than two decades benefits all three parties, according to industry analysts. But experts said the change meets the needs of the three organizations, each of which is undergoing substantial transformation in a shifting parcel environment. For FedEx Express, losing the postal business means it now has the freedom to aggressively move ahead with shrinking its large air network in conjunction with a huge corporate initiative to control costs. The new agreement has a minimum base term of five and a half years, under which UPS will transport first-class mail, Priority Mail and Priority Express Mail.