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Cargo containers arriving on ships at U.S. ports can sit for weeks before moving inland because railroads are overwhelmed by the sheer number of steel boxes they must manage, The Wall Street Journal reported.
About 29,000 containers are stacked in yards at the Los Angeles port waiting for trains to take them away, triple the usual number, port authorities said.
Containers were sitting in yards at the ports of Long Beach and Los Angeles an average of 11.3 days in May, 18 percent longer than in April and three times as long as when this year began, the Pacific Merchant Shipping Association said.
Some retailers are abandoning the idea of rail freight and instead are bringing their shipments to warehouses on trucks, the WSJ said, which take longer and are more costly per mile.
The rail clogs are extending from coastal ports to inland freight hubs such as Chicago, where containers wait 20 percent longer than they did a year earlier, BNSF Railroad reported.
BNSF, a main rail artery connecting West Coast ports to the heartland, has limited the number of cargo containers it will tote out of California’s ports because of the number that has piled up in its railyards.
The jams are caused by retailers’ delays in unloading containers and taking away their goods, rail officials have said, a problem worsened by the nation’s shortage of truck drivers.
The slowdown is sharpening the mismatch between retailers’ inventories and consumers’ needs.
Many shipments that were ordered for winter or spring are now arriving at a time when consumers are shopping for summer or curtailing spending as inflation pinches.
Demand for intermodal transport, combining trains and trucks, plunged last summer and fall, then soared again as this year began, logistics consultant Lawrence Gross told the WSJ.
Railroads “don’t have warning of what’s coming and the changes are severe,” he said.
TRENDPOST: As we report in “Rates to Sail Goods From China to U.S. Fall By a Third” in this issue, coastal ports are clearing their backlogs of ships that have been waiting to offload their cargo. That is a necessary first step in untangling supply chains.
The next step will be railroads clearing the tsunami of shipping containers coming their way. However, the flood of cargo containers into the rail system further illustrates the antiquated U.S. infrastructure and rail system.
We have noted that the 20th century was the American century but the 21st will be the Chinese century. Why? Because the business of America—as clearly evidenced by the Ukraine War and the $57 billion sent to that country to keep bloodying the killing fields—is, and has been, war… while the business of China is business.
Indeed, as the United State has squandered countless scores of trillions to start and fight wars, China has been spending its trillions on building its infrastructure.
In the past 10 years alone China built 1.1 million km (683,508 miles) of railway lines and roads. And last year, railroad haulage was 4.78 billion tons, up more than 22 percent from 2012.
TREND FORECAST: Rail freight tie-ups will continue to hold inflation’s rate high through the summer at least.
However, with supply lines unwinding and consumers buying less (“Retail Sales Down, Prices Up,” 21 Jun 2022), supply chains should largely have cleared before this year ends, barring unforeseen shocks.