Rail Congestion Delays Impacting Inbound Trains From Los Angeles

We wanted to relay the news that customers’ cargo coming to inland destinations from Los Angeles is being adversely impacted by rail delays with the Burlington Northern Santa Fe (BNSF) and the Union Pacific (UP).

There is tremendous congestion, owing in part to a push of peak season containers that were trying to arrive a) ahead of Christmas, b) before lines made changes for the new IMO 2020 fuel requirement and c) before the still-intended imposition of duties on the last tranche of Chinese imports begins on December 15th. Similar to last year’s front-loading of imports to beat the tariffs, US importers are feeling the same worry, given the ups and downs in the press of the negotiations between the US and Chinese delegations.

Railroads are also responsible for maintaining a balance of equipment that brings railcars carrying loaded imports back to the ports with a mix of empty containers for repositioning and loaded export containers. If their forecasting is poor, or there is weather delaying the unfettered movement of their trains, these can have a cascading effect on the ability of shippers to move their cargo to and from ports of arrival and departure on a timely basis.

James Napolitano, Vice President Transportation for one of our partners STG Logistics, points all the way back to a BSNF derailment east of Flagstaff, Arizona, in mid-October that closed a major artery connecting Los Angeles and Chicago.

“It has been sort of a perfect storm situation with the rail ever since the major rail derailment in Arizona,” Napolitano shares. “This happened during peak transportation season and really has been a struggle to get back on pace since this event.”

The business of moving containers inland from the West Coast is a tricky one for railroads and a number of factors impact their on-time performance which can lead to delays and added transit time that is outside of our control.

For shippers of full container loads, or FCL, when a vessel arrives at the port of discharge, there are, on average, 9,000 – 12,000 containers to be removed from the vessel. Some remain in the city where the vessel called (like Los Angeles, Seattle or New York) while others move inland on one of a handful of remaining railroads.

Many of these terminals now have on-dock rail, meaning the container is taken off the vessel and either built directly on a rail car to move the container, or is taken a short distance by a truck on the pier to where the container is placed on the rail car.

For shippers of less than container loads, the containers which have the cargo for multiple shippers is taken to a warehouse for devanning and segregation. This means that the container was filled with cargo that was coming to Los Angeles where it was then taken out of the container, sorted and put in another container or truck to be moved, still by rail, to an inland destination.

Those containers are taking to a staging area for the railroad off the pier, but still to be part of an intermodal train which is filled with international ocean containers and truck containers and trailers.

At TOC, we understand that vagaries in transit times pose risks to our customers’ JIT supply chain demands. We are working with all of our transportation partners to minimize these delays wherever and whenever possible and strongly advise that if there is a shipment in transit that you anticipate will become mission-critical for delivery that you notify us as early as possible so we can work to discuss what options are available for a mid-shipment intervention or diversion.