Freight engines and shipping containers were observed at a Union Pacific Intermodal Terminal rail yard in Los Angeles, California, on November 21, 2022. The West Coast ports have been experiencing record imports in recent months, causing rail congestion as holiday goods and other items accumulate. Nearly half of the containers destined for freight rail from the Port of Los Angeles have been waiting over nine days to be transported.
Prior to the surge in containers in August and September, the average rail dwell time for the San Pedro Basin—comprising the Ports of Los Angeles and Long Beach—was four days. In September, the Port of Los Angeles handled 954,706 twenty-foot equivalent units, marking it as the busiest September on record for the port. Gene Seroka, the executive director, reported there are 20,000 rail containers awaiting removal and is engaging with railroads daily about prolonging dwell times. Seroka emphasized that rail congestion has not influenced port vessel or trucking operations, underscoring the aim for improvement across port activities, with railroads being a priority.
Seroka is observing three main factors affecting future container growth and port efficiency: the early Lunar New Year, the presidential election, and the robust economy reflected in recent port volume data. October is anticipated to be strong, with projected volumes between 800,000 and 900,000 TEUs. An expected increase in cargo might occur early due to the Lunar New Year and potential tariffs depending on the presidential election outcome.
At the Port of Long Beach, containers have a rail dwell time of seven days. Mario Cordero, the executive director, stated that despite historic TEU numbers in recent months, there is no current congestion, and operations remain smooth. On-dock rail movement has increased by approximately 26%.
In September, the Port of Long Beach saw 829,499 twenty-foot equivalent units, marking the fourth consecutive month of year-over-year cargo increases driven by holiday-related products.
The National Retail Federation, represented by CEO Matt Shay, anticipates strong holiday sales, predicting growth between 2.5% and 3.5% over 2023, potentially reaching $989 billion in holiday spending. Amazon plans to hire 250,000 additional workers for the holiday season, matching last year’s hiring figures. According to Panjiva, significant amounts of holiday-themed goods, decorations, and consumer products are passing through the Port of Los Angeles. Companies like Home Depot, Target, and Walmart are bringing in holiday items.
Eric Byer, CEO of the Alliance for Chemical Distribution, highlighted the significance of the ports of Los Angeles and Long Beach for importing essential chemicals from China due to an East Coast port strike causing delays. Retailers are anxious about the increased rail dwell times during the peak holiday shipping season, according to Jon Gold, vice president of supply chain and customs policy at the National Retail Federation. Retailers aim for swift cargo movement to maintain fluidity and avert further delays.
Freight rail lines such as Union Pacific and BNSF are altering strategies to accommodate volume increases. Union Pacific is utilizing resources to manage intermodal volumes from the Los Angeles and Long Beach ports, while BNSF has encountered challenges like diverted volumes and a recent lithium battery fire. BNSF has made infrastructure investments to manage record volumes, ensuring readiness with schedules and capacity to support operations.
Logistics managers report a two-week average rail dwell time for containers at Los Angeles and Long Beach, occasionally extending to four weeks in some cases. Paul Brashier, from ITS Logistics, outlines contingency plans that involve bypassing initial rail transfer at ports to mitigate rail issues.
Geotz Alebrand, of DHL Global Forwarding, noted the longer rail dwell times pose concerns for customers owing to a lack of returning rail cars. DHL is advising clients on alternative strategies like rerouting cargo to the East Coast despite existing labor contract negotiations.
Finally, rail companies Norfolk Southern and CSX, which run freight out of the East Coast ports, have benefitted from diverting West Coast-bound containers throughout periods like the Covid-19 pandemic to reduce delay incidences.
