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U.S. Port Backups Are Extending Into Freight Rail Supply Chains


Port bottlenecks which have tied up U.S. provide chains are spreading from the docks to the nation’s freight rail networks, elevating prices and including new delivery issues for importers making an attempt to handle the circulate of products.

Some retailers are ready weeks to maneuver cargo by practice out of Southern California’s ports of Los Angeles and Long Beach, whereas others are giving up on the railroads and shifting shipments of furnishings, attire and different client items to vehicles for lengthy inland journeys on highways.

The backups stretch to main freight hubs together with the important thing transit level at Chicago, freight executives say, the place containers have been piling up at rail yards. The congestion has led BNSF Railway Co., a unit of Berkshire Hathaway Inc. and one of many most important rail operators connecting the U.S. West Coast to inland factors, to restrict the variety of bins the railroad will perform of the Southern California port advanced.

Lisa Leffler,

senior director of worldwide logistics for Black Diamond Equipment Ltd., an outside sports activities items retailer primarily based in Salt Lake City, Utah, mentioned her agency is shifting some items to vehicles although that may add 1000’s of {dollars} per load to already excessive freight prices. “This is what we were doing at the peak of congestion in 2021,” Ms. Leffler mentioned.

The congestion in intermodal operations, which mix truck and rail transport for longer freight hauls, is including to delays in getting items to distribution facilities and shops. It additionally provides to complications for retailers dealing with inventories which might be mismatched to shifting client shopping for patterns and raises shipping expenses at a time when transportation prices are contributing to decades-high U.S. inflation.

U.S. importers have struggled for greater than a yr with weekslong waits for vessels to unload on the California ports, the principle U.S. gateway for items from Asia. A vessel queue for berths that reached more than 100 ships in January fell beneath 20 this month, in keeping with the Marine Exchange of Southern California, its lowest degree since July 2021.

About 29,000 bins have been being held in container yards on the Port of Los Angeles this month awaiting pickup by rail, greater than triple the standard quantity, in keeping with

Gene Seroka,

the port’s government director.

The Pacific Merchant Shipping Association says rail containers waited on the Los Angeles and Long Beach ports a mean of 11.3 days in May, 18% longer than in April and triple the common wait time in the beginning of the yr.

The two railroads that serve the ports,

Union Pacific Corp.

and BNSF, say the delays in selecting up bins are being brought on by congestion at freight-switching yards 1000’s of miles inland in logistics hubs like Chicago.

Transportation and logistics firms say containers are stacking up there as a result of producers and retailers are too sluggish to choose up and unload cargo. A Union Pacific consultant mentioned cargo homeowners must deal with their shipments “in a timely manner so inland terminals remain fluid and we can continue to move containers from the ports.”

The rail congestion revives backups that overwhelmed freight hubs final summer season, when railroads dealing with rising stacks of containers in Chicago and different websites stopped accepting shipments from ports for days or even weeks so they might clear the backlog.

Shipping containers at a rail yard in Chicago.



Photo:

Scott Olson/Getty Images

Domestic provide chains are struggling to deal with surges of cargo which might be whipsawing freight operations, mentioned

Lawrence Gross,

president of Gross Transportation Consulting. Intermodal volumes have swung sharply over the previous yr, he mentioned, dropping quickly by means of final summer season and fall, then snapping again over the previous six months.

“This push-pull is very difficult to deal with,” Mr. Gross mentioned, significantly when railroads “don’t have much warning of what’s coming and the changes are severe.”

Tom Williams,

group vp for client merchandise at BNSF, mentioned the railroad is limiting the variety of containers it strikes out of Southern California ports till it may be positive it has the capability to deal with them in Chicago.

Mr. Williams mentioned containers are sitting about 20% longer in freight-switching yards in Chicago in contrast with a yr in the past. BNSF is shifting some containers to third-party yards to liberate house, he mentioned, however that makes use of up inland trucking capability which can be briefly provide. “This isn’t sustainable over time,” he mentioned.

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Transportation and logistics executives say shortages of warehouse staff and truck drivers in addition to of the steel trailers needed to haul containers between rail yards and warehouses are contributing to the delays.

Dan Bergman,

chief government of TraPac LLC, which operates a container terminal on the Port of Los Angeles, says his yards are filled with 5,000 containers ready to maneuver by rail, about triple the standard quantity.

The terminal has reduce 5 shifts this month as a result of there wasn’t sufficient railroad capability to load bins, he added. “The numbers are not improving,” he mentioned. “At some point we will run out of space.”

Write to Paul Berger at Paul.Berger@wsj.com

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