Bottleneck At Nation’s Busiest West Coast Ports

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Railroad bottleneck at nation’s busiest West Coast ports reaches inflection point

By: Lori Ann LaRocco, CNBC, July 8 2022:

• 60% of all long-dwell containers at the Port of Los Angeles are rail-bound.
• Container wait for rail is a little over 8 days for the ports of Los Angeles and Long Beach.
• East Coast ports including the Port of Norfolk, Port of Savannah, and the Port of New York and New Jersey are seeing more shipping activity as a result.

Rail congestion from Berkshire Hathaway subsidiary BNSF and Union Pacific, the railroads servicing the West Coast ports, is getting worse and slowing down container processing at the nation’s largest port complex.

Slowdowns involving containers limits future availability and constricts supply, which can spark an increase in container prices. Congestion was one of the reasons behind the surging freight prices during the pandemic, prices that have been passed onto the consumer contributing to inflation.

“60% of our long dwelling containers are scheduled to go on the rail,” said Gene Seroka, executive director of the Port of Los Angeles. “Our land capacity is at 90% .”

The increase in time of the import containers staying in the port is one of the key metrics being tracked by the CNBC Supply Chain Heat Map.

A terminal’s land capacity for the efficient movement of containers is 70-75% so the trucks and equipment can easily move.

Vessel anchorage to berth times are steadily improving, allowing for more boxes to land onto terminals, but the fact that rail car capacities are limited will mean future containers may start stacking up in rail yards waiting to be loaded and moved appropriately, according to Captain Adil Ashiq, United States Western Region executive for MarineTraffic. “As these containers stack up, terminals may eventually run out of space, and be unable to take new imports – a slippery slope which may cause vessel dwell times to once again increase, or cause the carriers to instead call another port altogether and avoid the slowdown,” Ashiq said.
Los Angeles, Long Beach wait times tick up

The wait time for containers leaving the ports of Los Angeles and Long Beach continues to tick up. The dwell time for a container bound for rail is 7.5 days at the Port of Los Angeles, and a little over 8 days at the Port of Long Beach.

“We are at a point of inflection as to the rail bottlenecks, including the lack of rail cars at the nation’s largest and most significant container gateway,” said Mario Cordero, the executive director for the Port of Long Beach.

The Port of Oakland’s two rail yards are near-dock, not “on-dock” like the ports of Los Angeles and Long Beach. Port officials told CNBC roughly 10% of its imports are moved by train. The Pacific Northwest, however, relies on rail to move its imports and exports. The Northwest Seaport Alliance (NWSA) is comprised of the ports of Tacoma and Seattle. These ports, like the ports of Los Angeles, Long Beach, and Oakland are landlord ports. But unlike the ports of Los Angeles and Long Beach, which track the dwell times of their containers bound for rail, the NWSA does not and referred CNBC to the terminals who do not share that information with the NWSA. The terminals did not respond to requests for comment.

According to the CNBC Supply Chain Heat Map, the dwell times of an import container leaving the port of Tacoma or Seattle either by truck or rail is over 16 days for Seattle, and 8 days for Tacoma.

“The decision of where a container bound for rail goes is decided by the ocean carriers,” said Jack Hedge, executive director of the Utah Inland Port Authority. “The carriers are limiting which inland ports to go to. If they were flexible to diversify their rail routes, it would ease the bottlenecks on the rails and free up congestion. But that would mean their containers would be inland longer.”

Union Pacific said they were unable to comment on the congestion because they were in a quiet period due to upcoming earnings.

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