World

Port bottlenecks in the US are spreading into freight rail networks

Jul 6, 2022 United States

The bottlenecks that have constrained the country’s supply chains are now extending from the docks to the freight rail networks, raising costs and difficulties for importers

According to the Wall Street Journal, some retailers are waiting weeks to move the merchandise by train out of Southern California's ports of Los Angeles and Long Beach, while others have decided to shift the shipments of consumer goods to trucks for long inland journeys on highways.

The Pacific Merchant Shipping Association reported that rail containers waited at the Californian ports, the main gate for goods coming from Asia, for an average of 11.3 days in May, which is 18% longer than in April and triple the average wait time at the start of the year.

The two railroads that serve the ports, Union Pacific Corp. and BNSF, say the delays in picking up boxes are being caused by congestion at freight-switching yards thousands of miles inland in logistics hubs like Chicago. Transportation and logistics executives add that behind this are the shortages of warehouse workers and truck drivers, as well as of steel trailers required to haul containers between rail yards and warehouses.

Meanwhile, the congestion in intermodal operations (which combine truck and rail transport for longer freight hauls) brings new difficulties for retailers. As goods arrive with delays to distribution centres and stores, they must cope with inventories mismatched with shifting consumer buying patterns and raise shipping expenses, at a time transportation costs are contributing to the highest inflation rate in decades.

Source and Image Credits: wsj.com

United States Distribution Logistics Supply chain