Philadelphia, South Jersey Ports Expect Cargo Uptick After Baltimore Disaster, But Situation Is ‘Fluid’

Philadelphia-area ports have begun receiving cargo ships and barges diverted from the Port of Baltimore after that city’s Francis Scott Key Bridge was destroyed in an accident that killed six people and shut down the busy logistics hub.

As of Wednesday, the Port of Philadelphia and South Jersey Port Corp. were taking in calls for rerouted ships meant originally for the port 105 miles to the south. Baltimore has the 10th-busiest port in the nation and is a leading importer and exporter of automobiles.

The MSC Alina, a container ship, was the first diverted to dock in Philadelphia on Wednesday evening, Ryan Mulvey, director of government and public affairs at the Port of Philadelphia, also known as PhilaPort, told Bisnow.

Mulvey said another one to two ships could arrive soon, although the full scope of Philly’s role in keeping the supply chain humming is still unknown. Mulvey told Bisnow he was awaiting an imminent call from Secretary of Transportation Pete Buttigieg to find out how long diversions would last and its likely intake volume.

“Yesterday and the day before, the focus was still on the victims and rescue and recovery. And now, today, some of the logistics decisions are being made as to where to discharge the cargo from the ships that were destined for Baltimore,” he said, noting the situation is “fluid.”

Last year, Philadelphia’s port took in about 250,000 vehicles. But the port has capacity for 500,000, along with separate terminals for breakbulk cargo, items like rolled paper, timber and steel that can’t as easily fit into a container on a ship.

On the Camden side of the river, South Jersey Port Corp. also has formerly Baltimore-bound ships making their way to the city, CEO and Executive Director Andrew Saporito told Bisnow.

“On the breakbulk side, as of yesterday, we've committed to take in three ships carrying aluminum, metals and plywood into our terminals in Camden,” Saporito said, adding that represents a 20% increase in volume for the port.

Despite a small uptick in arriving ships, no slowdowns have been reported in either Philadelphia or Camden. But depending on how many ships are rerouted, Philadelphia’s storage yards and warehouses could see more incremental leasing and some capacity constraints, Joe Dunlap, managing director of supply chain advisory at CBRE, wrote in an email.

Most likely, though, any activity will be “on a short-term basis until we know more about the duration of the debris removal in Baltimore,” he added.

The fallout for Baltimore’s industrial real estate sector is likely to be even more dramatic. 

“We may see under-utilization and available space sub-leased or potential lease terminations and thus increased availability and lower asking rents,” Dunlap wrote.

Economist Anirban Basu, CEO of Sage Policy Group, previously told Bisnow that Baltimore's port was the city's “No. 1 economic development driver.” The port closure could cost up to $15M a day in lost economic activity, according to Daraius Irani of Towson University's Regional Economic Studies Institute. 

The Port of Baltimore remains roped off as a unified response team of government officials reviews any possible environmental hazards near the site wreckage, an announcement on the port's website showed late Thursday. 

As for future reroutings and how extensive they will be, U.S. Coast Guard Petty Officer Kimberly Reaves told Bisnow there is not yet an official count of how many ships could be diverted up the Delaware River. Captain David O’Connell in Maryland is in charge of directing ship traffic and coordinating with other regional maritime ports.

So far, warehouse capacity at both ports is sufficient to handle the influx of new cargo, Mulvey said. 

However, the busiest season for shipping is January through April, according to Saporito. There have been no public updates from the U.S. Department of Transportation on a timeline for reopening the Port of Baltimore.

“You have to remember a lot of the ships that are coming into Baltimore are at sea. So, if the channel is cleared in time for those ship arrivals, obviously they would just come right into Baltimore,” Mulvey said. “If they have to be diverted, we really don't know [if] we’re looking at two weeks, three weeks, a month. I think that's yet to be seen.”