Expeditors may feel impact of Ocean Network Express container loss

The boxship MV Madrid Bridge, operated by Ocean Network Express Pte. Ltd., suffered a container collapse and loss in the North Atlantic Ocean on its way to the Port of New York and New Jersey, rerouting to the Port of Charleston, S.C., for repairs and to off-load remaining damaged containers. The ship, which departed from Singapore and transited the Suez Canal, likely hit weather that caused the loss of about 60 containers and damaged a further 80 on the deck, according to the Japanese liner, or ONE.

Container ships use a method of stacking that connects each container to the ones above and below it, which can lead to progressive collapses like this if part of the structure fails. Making a dash to Charleston to fix the damage was expected as the vessel is no stranger to the port. Calls at the Port of Charleston discharged 8,353 twenty-foot equivalent units in 2021, up from 2,035 TEU in 2020, putting the site third-largest destination by volume for the Madrid Bridge among the U.S. East Coast ports. The Port of New York and New Jersey, the intended destination, reported 17,295 TEU in 2021, while the port of Savannah, Ga., posted 11,438 TEU in the same period. Stopping along the route, although early, was more likely to get more goods delivered on time with the use of inland networks. Regardless, the accident will likely not help ONE, whose imports in December 2021 fell 24.0% year over year.

Potential consequences from the incident could affect Expeditors International of Washington Inc., which has imported 7,121 TEU on the Madrid Bridge since January 2020, along with United Parcel Service Inc. and Geodis Logistics LLC, which has imported 1,795 TEU and 1,205 TEU, respectively. Other companies that have shipped goods on the vessel in the same period include The Home Depot Inc. with 584 TEU, Samsung Electronics Co. Ltd. with 358 TEU and Bob's Discount Furniture with 598 TEU. One aspect these companies will likely watch out for is ONE's declaration of a general loss, an announcement that all cargo owners on the vessel will have to share in the cost of the lost shipment. The declaration is designed to allow the ship to discharge cargo if necessary to save the craft while adding costs, on top of a delay, for shippers.

Eric Oak is a researcher at Panjiva, a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.