crisis! The container transportation here has been overwhelmed. Many railway operators have taken compulsory measures. MSC issued a warning.
As imports from the United States hit a record high, in order to alleviate the serious congestion in the inland multimodal transport hub and clear the large backlog of containers, the US freight railroad has begun to reduce rail transportation at ports such as Los Angeles, Long Beach and New York. Since July 18, the largest rail operator in the United States, Union Pacific, has suspended shipping containers from West Coast ports (Los Angeles/Long Beach, Oakland, Seattle and Tacoma) to the inland, especially Chicago, for a period of 7 days. . Chicago is the largest railroad hub in the United States and has been at the center of the spread of congestion on the rail network. There are reports that some containers have been stranded in Chicago for six or seven weeks.
The UP's move by the Union Pacific Railroad is a compelling action for railways to deal with congestion, and other U.S. Tier 1 railway companies have also taken drastic measures.
This month, Norfolk Southern, a first-tier railroad company that mainly serves the East Coast of the United States, will significantly reduce the number of containers it receives on its four busy routes, mainly due to lack of chassis and strong demand. Prior to this, NS announced at the end of June that it would cut emergency services in 24 lanes. The CSX Transportation Company, another tier one railroad company, cut the number of scheduled slots from Bedford to Chicago. In addition, the BNSF Railway Company has set an upper limit for the allocation of transport capacity. The carrier MSC stated in a service consultation on Monday that starting from last Sunday and in the next two weeks, MSC rail supplier BNSF will meter and ration incoming trains at the Los Angeles and Long Beach terminals.
MSC stated that the cargo will therefore remain at the terminal until the restrictions are lifted or "weakened", and cargo shipped to Chicago or unloaded from the ship will be affected.
"Considering these challenging situations, changing destinations may be difficult," MSC said. It also added that BNSF did not set these restrictions in the ports of Oakland and Tacoma. MSC also pointed out that since last Sunday, an unnamed MSC rail operator has begun to measure traffic from New York to three Midwestern destinations: Chicago, Cleveland and Indianapolis. "If the current situation does not improve, these temporary measures are likely to be extended to other railway operators," MSC said. One reflection of the overburdening of the U.S. rail network is the dramatic increase in the number of imported container transshipments from the West Coast to the Midwest. Trucking is also tight, and shippers have reported supplier embargoes, restrictions and surcharges to control capacity, which are often seen in the parcel and LTL industry.
However, PMSA, which represents the West Coast liner company and marine terminal of the United States, expressed concern about the suspension. PMSA said that the suspension of the plan will increase the current cargo backlog at the terminal, which will cause railway cargo to continue to dock at the terminal, thereby increasing congestion.
Now, inland problems are returning to the port, reversing the port’s efforts to increase productivity and ease congestion.
At the Port of Los Angeles/Long Beach, container dwell time and truck turnaround time deteriorated in the latest statistics in May and June. The number of ships at anchor has increased, reaching 18 earlier last week, although the Port of Los Angeles now has 15 container ships per day, compared to 10 per day before Covid-19. At the same time, imports remain strong. According to data from the American Retail Federation, imports increased by 19% compared to June 2019. The organization predicts that imports will continue to climb until mid-August, and then gradually slow down, but still achieve double-digit growth over 2019. At a media conference last week, Gene Seroka, CEO of the Port of Los Angeles, pointed out that the peak cargo flow in the early season has arrived, and some retailers have moved ahead to avoid delays. He expects freight volumes to peak from August to October. There are indications that the increase in transportation volume will increase the pressure on the infrastructure, leading to more delays and bottlenecks in transportation capacity.