Foley & Lardner LLP partner Nicholas Ellis is quoted in the Supply Chain Dive article, “How auto supply chain managers can navigate the Baltimore port stoppages,” discussing the recent tragic collapse of the Francis Scott Key Bridge and what the subsequent stoppage at the Port of Baltimore means for automotive supply chains.
“Given the just-in-time nature of automotive production, re-routing cargo volumes can delay component shipments needed to keep supply chains moving,” Ellis said.
“Companies likely will be able to adjust and route future shipments through other ports without significant disruptions to timing until the wreckage can be cleared and shipping lanes reopened,” he continued. “However, longer shipping times may require longer lead times. It may also result in delays and increased costs as other ports (many of which are already strained) have to absorb the additional capacity.”
Mitigation plans for supply chain managers depend on how their operations are impacted, Ellis noted. For instance, companies whose goods are being directly impacted should consult with their legal counsel to review contracts and obligations.
“In particular, if they are unable to meet any obligations to their own customers due to this event, they should review any provisions of their contract concerning force majeure and excusable delay to understand whether they apply, and what notices they may need to provide,” Ellis added.
