TERMINAL operators at the ports of Los Angeles and Long Beach are bracing for an increase in their rail container backlogs as both Union Pacific (UP) and BNSF are implementing measures to restrict the flow of intermodal containers to their congested ramps near Chicago.
At the same time, tracking tools at both ports project a significant increase in laden imports from Asia in August, which will only pile more containers into a supply chain that is expected to be severely taxed during the peak shipping season that begins in a matter of days, reports IHS Media.
'The surge is very much alive and will continue in the months ahead, and it will stress the entire system,' Noel Hacegaba, deputy executive director and COO at the Port of Long Beach.
Los Angeles-Long Beach, with 12 container terminals, handles 50 per cent of US imports from Asia, according to PIERS. The ports have handled record or near-record monthly import volumes every month for the past year as they continue to struggle with container dwell times that restrict cargo velocity.
According to the Pacific Merchant Shipping Association (PMSA), which represents terminal operators, container dwell times for local-delivery cargo increased to 4.76 days in June from 3.96 days in May. Rail container dwell times averaged 11.8 days from an already high 10.5 days in May, PMSA said in a statement.
Rail container dwell times may increase further depending how long restrictions on intermodal shipments to Chicago remain in place. Although the national rail networks from Southern California serve many of the intermodal rail hubs in the eastern half of the US, Chicago is the largest destination.
International rail volume between the Southwest and Midwest, which includes Los Angeles to Chicago, has increased faster than the overall North American market. Ocean container volume between the Southwest and Midwest increased 43 per cent in the second quarter compared with a year ago, while volume rose 25 per cent across all North America, according to the Intermodal Association of North America (IANA).
Second quarter volume compared with 2019 - when the Covid-19 pandemic was not a factor - increased 22 per cent between the Southwest and Midwest, while the broader North American market only grew 5.6 per cent.
Therefore, when UP announced that it is temporarily suspending eastbound intermodal service from all West Coast ports to Chicago, and BNSF followed with a statement that it will meter intermodal shipments to Chicago, the terminal operators said it is likely that the backlog of rail containers that has been congesting their facilities in recent months will get worse. That will compromise the ability of the terminals to vacate both rail containers and those earmarked for local delivery.
'We've already cut [longshore] gangs because of the backlog in our yard. We have to use more workers to clear away the backlog to make additional space in the yard,' said a terminal executive who did not want to be identified.
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At the same time, tracking tools at both ports project a significant increase in laden imports from Asia in August, which will only pile more containers into a supply chain that is expected to be severely taxed during the peak shipping season that begins in a matter of days, reports IHS Media.
'The surge is very much alive and will continue in the months ahead, and it will stress the entire system,' Noel Hacegaba, deputy executive director and COO at the Port of Long Beach.
Los Angeles-Long Beach, with 12 container terminals, handles 50 per cent of US imports from Asia, according to PIERS. The ports have handled record or near-record monthly import volumes every month for the past year as they continue to struggle with container dwell times that restrict cargo velocity.
According to the Pacific Merchant Shipping Association (PMSA), which represents terminal operators, container dwell times for local-delivery cargo increased to 4.76 days in June from 3.96 days in May. Rail container dwell times averaged 11.8 days from an already high 10.5 days in May, PMSA said in a statement.
Rail container dwell times may increase further depending how long restrictions on intermodal shipments to Chicago remain in place. Although the national rail networks from Southern California serve many of the intermodal rail hubs in the eastern half of the US, Chicago is the largest destination.
International rail volume between the Southwest and Midwest, which includes Los Angeles to Chicago, has increased faster than the overall North American market. Ocean container volume between the Southwest and Midwest increased 43 per cent in the second quarter compared with a year ago, while volume rose 25 per cent across all North America, according to the Intermodal Association of North America (IANA).
Second quarter volume compared with 2019 - when the Covid-19 pandemic was not a factor - increased 22 per cent between the Southwest and Midwest, while the broader North American market only grew 5.6 per cent.
Therefore, when UP announced that it is temporarily suspending eastbound intermodal service from all West Coast ports to Chicago, and BNSF followed with a statement that it will meter intermodal shipments to Chicago, the terminal operators said it is likely that the backlog of rail containers that has been congesting their facilities in recent months will get worse. That will compromise the ability of the terminals to vacate both rail containers and those earmarked for local delivery.
'We've already cut [longshore] gangs because of the backlog in our yard. We have to use more workers to clear away the backlog to make additional space in the yard,' said a terminal executive who did not want to be identified.
SeaNews Turkey