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Containers Quickly Pile Up At US Rail Terminals, Add To Port Strains

Tyler Durden's Photo
by Tyler Durden
Friday, Sep 24, 2021 - 07:00 PM

The US continues to face an unprecedented shipping crisis as logjams at ports and railyards continue to worsen with no relief in sight. 

The increasing volume of containers, combined with a labor shortage of dockworkers and truck drivers, rail and storage capacity, have left shipping networks with huge congestion problems that continue to increase.

Currently, more than 100 container ships are waiting to enter US ports from coast to coast. Some of the largest congestion is in San Pedro Bay off the port of Los Angeles, with more than 61 vessels waiting to enter. Dwell time for vessels is six days, the wait time for on-dock rail is nearly 16 days, and then it takes an additional week to move the container on the street to warehouses. 

What's caught our attention is import congestion at railyards. Using data from Hapag-Lloyd AG, one of the world's top shippers, we find that container dwell time at 11 major railroad terminals averages 9.8 days this month, up from 6.7 days in May and 5.9 days in February. 

Source: Bloomberg

Noted above, the port of Los Angeles has the highest wait times out of all railyards. Delays are also increasing in Charleston and Detroit. 

We recently said port officials had extended operating hours at truck gates to reduce a massive backlog of containers piling up retail, manufacturing, and agricultural supply chains. 

Hapag-Lloyd said the delays at Los Angeles and Long Beach ports are the most extreme and would "continue for the remainder of the year." 

Bloomberg points out that increasing demand for imports mixed with labor shortages of truck drivers is a very severe issue plaguing major companies' supply chains, such as packaged good giant General Mills Inc.

"So we have hundreds of disruptions in our supply chain literally, and it really changes on a daily and weekly basis," said Jonathon Nudi, group president of North America retail at General Mills. "The bulk of our discussions right now with retailers are really around service and making sure that we can ship the product that our consumers are ultimately looking for."

Import congestion appears to be worsening, and the focus is now on railyards. 

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