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Category: Transportation and Logistics

Supply Chain News: US Rail Bottlenecks Growing, as CSX is Turning Away Freight in Face of Labor Shortages


With Shanghai reopening and Peak Season Neigh, Rail Shippers could See Longer Delays

June 9, 2022

Rail bottlenecks, especially long delays getting in to the rail yards of Chicago, were an important factor in the overall glitches in the flow of goods that most visibly manifested itself with dozens and at times more than 100 ocean containers ships afloat in the ocean waiting for berths at the ports of Los Angeles and Long Beach. (See Container Congestion and Delays move from Ports to Chicago Rail Hub.)

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Word is that rail companies are open to negotiate wages and benefits, but they are less likely to give in on work rules, especially the plan to move to one-person locomotive crews.

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Now, labor, railcar and chassis shortages are again causing issues in the transport of rail freight, risking still more disruptions for importers and shipper.

In fact, CSX CEO Jim Foote said the rail carrier has been turning down business recently due to a lack of capacity. Foote said the problems were the result of labor shortages, saying that the carrier has struggled to recruit enough workers to meet staffing needs.

Foote said that CXS’ annual attrition rate has grown from 7% to 10%. A recruitment campaign added in 1,000 new rail workers last year, but that just about covered the number of employees who left the company over the same period.

As reported by web site last week, there have been signs of looming troubles.

Average dwell times for intermodal containers at terminals on the west coast been rising over the past months. Att the Los Angeles and Long Beach complex, they rose from 7.7 days in March to 9.6 in April. According to the Pacific Maritime Association, which represents the container terminal operators and lines on the west coast on labor and other matters, the current dwell is three times higher than required to ensure the smooth flow of rail freight.

There are similar delays at other west coast ports. Container dwell times now average nine days at the port of Oaklan, and the Northwest Seaport Alliance (NSWA) recently reported a two-digit cycle times (i.e., 10 days or more), attributing the growing cycle times to shortages of rail cars, locomotives and crews.

The general trend is worrisome enough, but made more so given the start of the peak shipping season is either already here or coming in a matter of weeks.

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The story quotes Gene Seroka, executive director of the port of Los Angeles, as saying the port could clear out the rail containers at its terminals within two weeks if Union Pacific and BNSF were moving containers at normal speeds.

Add to these challenges the on-going labor contract negotiations with the carriers. The unions have been working with an expired contract since 2020, and recently asked the National Mediation Board to declare an impasse and order arbitration.

Word is that rail companies are open to negotiate wages and benefits, but they are less likely to give in on work rules, especially the plan to move to one-person locomotive crews, which is naturally is opposed by the unions.

Another issue is chassis availability. A few days ago, Union Pacific warned that it might soon be forced to stack containers owing to the lack of chassis.

“If the expected surge in volume from Shanghai is going to play out as anticipated, importers and everybody involved in moving imports in the US will likely feel an acute sense of déjà vu in the weeks ahead,” the Loadstar notes.


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