The Impact of the Rail Strike on Maersk’s Operations:
Navigating Challenges and Ensuring Continuity
By Ignacio Torano, Managing Director – Drayage & Truckload, CURA
As the logistics industry grapples with the ongoing rail strike, Maersk, like many other companies, is facing significant challenges. The disruption in rail services has had a ripple effect across the supply chain, impacting both import and export operations. This blog explores the specific ways in which the strike is affecting Maersk’s operations and how the company is managing these challenges.
Import Operations
The rail strike has created a complex scenario for import cargo, especially for shipments that have already reached inland rail destinations or ocean terminals. Here’s how Maersk is handling the situation:
Cargo at Inland Rail Destinations
At inland rail destinations like CN and CPKC, gates remain open, and customers are expected to pick up their import cargo as usual. However, the ongoing strike means that storage and demurrage fees are still applicable, adding an extra layer of cost for businesses already strained by the disruption.
Cargo at Ocean Terminals
For cargo discharged at ocean terminals prior to the strike, the situation is clear: these shipments will remain at the discharge port until rail operations can resume. Unfortunately, this results in delayed deliveries and increased storage costs.
Cargo discharged during the strike is similarly stuck at the port, unable to move until the rail services are back online. This not only affects the timely delivery of goods but also creates congestion at the ports.
US Ports (Newark and Philadelphia)
To maintain supply chain fluidity, Maersk is considering utilizing off-dock depots in Newark for cargo discharged at Newark and Philadelphia ports. While this offers some relief, the additional transportation costs and storage fees will inevitably be passed on to cargo owners, further complicating the cost management for businesses.
Export Operations
The strike’s impact on export operations is equally significant, with Maersk implementing specific measures to manage the flow of goods:
Cargo at Origin Rail Ramps
For cargo that has already been gated-in at the origin rail ramp, Maersk has decided to hold these shipments until the strike ends. This decision, while necessary, means that export timelines are being pushed back, potentially affecting international trade commitments.
Cargo Yet to be Gated-In
Containers that have not yet been gated-in will be rolled to future vessels. This delay in gating-in due to the strike causes a domino effect, delaying entire supply chains and increasing the likelihood of missed deadlines and penalties.
Detention, Demurrage, and Storage Costs
The financial implications of the rail strike extend beyond just the transportation delays. Maersk has outlined how detention, demurrage, and storage fees will be applied during this period:
Export Empty Containers
Fortunately, detention fees will not be applied to export containers that cannot be gated-in due to the strike, offering some financial relief to exporters.
Import Empty Containers
Detention will still apply for import empty containers, as the return depots remain available. This continues to be a cost burden on importers, who must navigate the complexities of managing container returns during the strike.
Storage at Inland Rails and Ocean Terminals
For import rail cargo that has already reached inland destinations, storage and demurrage fees remain in effect, given that the gates are still open for cargo pickup.
For ocean terminals, the response varies by location. While Vancouver, Prince Rupert, and Fraser-Surrey have suspended their storage clocks, Montreal, Newark, and Philadelphia continue to apply storage and demurrage fees during the stoppage, compounding the financial pressures on affected businesses.
Looking Ahead
Maersk is actively monitoring the situation and adjusting its operations to mitigate the impact of the rail strike. As the situation evolves, Maersk will continue to communicate with its customers, providing updates and guidance to help them navigate these challenges. For businesses relying on Maersk’s services, staying informed and proactive is crucial to managing the disruptions and minimizing the financial impact.
The ongoing rail strike serves as a stark reminder of the interconnected nature of global supply chains and the importance of contingency planning in logistics operations. As we await the resolution of this strike, the lessons learned will undoubtedly shape how companies like Maersk approach future disruptions, ensuring greater resilience and adaptability in an ever-changing industry landscape.
Maersk has outlined specific measures to manage the impact of the rail strike on both import and export operations, including the application of storage and demurrage fees, and the handling of cargo at inland and ocean terminals. For more details on Maersk’s contingency plans during the strike, see their official update here.