A Union Pacific freight train carries freight east near Palm Springs, California, a major link of roadways and railways that connect Southern California metropolitan areas as well as the nation’s busiest port complex with the rest of the US .
David McNew | Getty Images News | Getty Images
train rush from Berkshire Hathaway Assistant BNSF and union pacificRailroads serving West Coast ports are deteriorating and slowing container processing at the nation’s largest port complex.
The slowdown associated with containers limits future availability and constrains supply, which can lead to an increase in container prices. Overcrowding was one of the reasons for the rise in freight prices during the pandemic, prices that have been passed on to the consumer to contribute to inflation.
“60 percent of our long-habit containers are scheduled to go on rails,” said Jean Cerocca, executive director of the Port of Los Angeles. “Our land capacity is at 90 percent.”
The increase in the time import containers stay in port is one of the key metrics being tracked by the CNBC Supply Chain Heat Map.
The land capacity of a terminal is 70-75 per cent for efficient movement of containers so that trucks and equipment can move smoothly.
According to Captain Adil, the vessel anchorage for berth time is continuously improving, allowing more boxes to land at the terminals, but limited rail car capacity will mean that future containers will be able to be loaded at the rail yard. and can begin to stack waiting to be moved appropriately. Aashiq, United States Western Region Executive for Marine Traffic. “As these containers pile up, the terminal may eventually run out of space, and be unable to take new imports – a slippery slope that can once again increase the vessel’s stay time, or the carrier That could instead cause another port to call altogether and avoid a slowdown,” Ashiq said.
Los Angeles, Long Beach Tick Wait Time
Waiting times for containers leaving the ports of Los Angeles and Long Beach are ongoing. The stay time for a container bound by rail is 7.5 days at the Port of Los Angeles, and a little over 8 days at the Port of Long Beach.
“We are at a point of change in the form of rail bottlenecks, including a lack of rail cars at the nation’s largest and most important container gateway,” said Mario Cordero, executive director of the Port of Long Beach.
The Port of Oakland’s two rail yards are near-dock, not “on-dock” like the ports of Los Angeles and Long Beach. Port officials told CNBC that about 10 percent of its imports are by train. The Pacific Northwest, however, relies on rail to move its imports and exports. The Northwest Seaport Alliance (NWSA) includes the ports of Tacoma and Seattle. These ports, such as the ports of Los Angeles, Long Beach and Oakland, are landlocked ports. But unlike the ports of Los Angeles and Long Beach, which track the stay times of their containers bound for rail, the NWSA does not refer to CNBC as terminals that do not share that information with the NWSA. The terminals did not respond to requests for comment.
According to the CNBC Supply Chain Heat Map, the stay time of an import container leaving the port of Tacoma or Seattle by truck or rail is more than 16 days for Seattle, and 8 days for Tacoma.
“The decision of a container bound for rail is decided by the ocean carrier,” said Jack Hedge, executive director of the Utah Inland Port Authority. “Carriers are limiting which inland ports to go to. If they were flexible enough to diversify their rail routes, it would reduce bottlenecks on rail and free up congestion. But it would mean that their containers would be longer Will be inland by time.”
Union Pacific said they were unable to comment on the crowd as they were in a period of calm due to upcoming earnings.
BNSF plans to pick up pace again
BNSF responded by email, saying that operational safety, service and efficiency are aligned across its network and “while these speeds are inconsistent at times, we are on the right track towards delivering superior service performance.”
BNSF noted that it has deployed additional engines to its active fleet in April and May. “We are continuing to evaluate and adjust the number of additional units that can join the fleet in alignment with freight volume,” it said.
BNSF is also focusing on turning over inventory in Chicago to get the cars back to Southern California as quickly as possible. “As we move through June, our efforts are beginning to yield positive results with greater velocity and productivity levels,” its email said.
BNSF plans to hire about 3,000 additional employees this year, including new staff for its engineering, mechanical and dispatcher teams, and about 1,800 train, yard and engine (TY&E) members. Over 257 (TY&E) members have completed their training and 237 more members are expected to complete their training in the next 90 days.
East Coast Ports Taking More Part
Overcrowding at ports and the threat of a labor recession or strike by longshoremen has prompted a parade of trade to move from the west coast to the east coast.
“From January to May, we had an 11.5 percent increase in import containers,” said Bethan Rooney, director of the Port of New York and New Jersey. “6.5 percent of that volume of cargo was transferred from west coast ports.”
Rooney said ports have seen unusually early arrivals in holiday items including Christmas trees as well as winter apparel. Household appliances are also part of long-lived containers.
The market share of the trade occupied by the East Coast can be tracked by the volume of containers.
The Port of Savannah, which has been seeing ships at anchor for 10 days, said the amount of processing it is processing is “staggering”.
“We expect 155 vessel calls in the month of July. Of these vessels, 39 or 25 percent are unplanned,” said Edward Fulford, a Georgia Ports Authority spokesman. ,This is the highest volume of ad-hoc and new service vessels the Port of Savannah has ever experienced. We know labor negotiations and delayed access by rail are prompting a significant shift in the calls of ships on the East Coast.”
The Port of Norfolk is seeing a tendency by US importers to bypass West Coast congestion and use the port’s rail services.
“until [this] In April, it was unheard of to move freight from Virginia to California by rail from east to west,” said Tom Capozzi, chief sales and marketing officer at Virginia International Terminals.
He said many cargo owners in California, importers who needed to restore reliability and predictability to their supply chain, began using its on-dock rail service. He said, “We are seeing some cargo owners in California showing interest in using Hapag-Lloyd’s reworked MGX service, where containers arriving on the Hapag Lloyd ocean carrier are transported by rail to Chicago and then to Chicago. Loaded onto a UP rail car. West Coast.”
first table-lloyd The MGX service had approximately 1,000 containers that were loaded onto the rail bound for California.
There are railroads serving the east coast ports. Norfolk Southern And csx,
railroad union dispute
Class I freight railroads and twelve rail unions have been embroiled in a labor dispute since 2020 and are currently in a 30-day “cooling off period”. The US Chamber of Commerce recently sent a Letter President Biden, imitating Labor Secretary Marty Walsh and Transportation Secretary Pete Buttigieg, urged the president to get involved.
“The railroad workers’ strike will be more disruptive than the long-distance strike on the West Coast,” Hedge said. “It will affect all business.”
The National Arbitration Board (NMB), an independent US federal government agency that facilitates labor-management relations within the nation’s railroad and airline industries, is scheduling a public interest meeting, which will begin July 12.
Labor struggle in Europe is an example of this How labor stops or slows trade on rails or ports, Labor talks in German ports are at a standstill and overcrowding has spread to other European ports.
in one Advisor For customers, the METRANS Group explained that they will implement a 48-hour suspension of trains as a result of its 200 railcars waiting in front of the CTA terminal in Hamburg.
Crane Worldwide Logistics says the existing congested building at European ports will take more than eight weeks to clear and will only increase if the logjam is built. These containers awaiting export include autos, auto parts and IKEA furniture and home goods.