For UP, BNSF, California Ports, New Measures to Restore Supply Chain FluidityWritten by Marybeth Luczak, Executive Editor
Union Pacific (UP) and BNSF are offering their ocean carrier customers incentives to expedite the flow of freight out of the ports of Long Beach and Los Angeles; meanwhile, the two California ports on Nov. 1 will start charging ocean carriers a daily fee for containers that linger on terminals.
UP on Oct. 25 reported that it was running a pilot program to encourage weekend in-gates and reduce port backlog. Through Dec. 31, the Class I railroad will offer a $60 per container refund for each container in-gated on Saturdays and Sundays at its near-port Intermodal Container Transfer Facility (ICTF) in Long Beach. “The refund will apply to containers in-gated incremental to each customer’s current 2021 weekend average,” according to UP.
The railroad recently increased gate access to 24/7 at ICTF, adding 20 weekend hours and providing customers with more opportunities to move freight in and out.
Among UP’s other actions to ease supply chain congestion: reopening its Global III terminal outside Chicago, Ill., and its Englewood terminal in Houston, Tex., to provide additional inland storage capacity; shuttling freight to “less stressed terminals within the same metroplex to maximize freight availability for its customers”; leveraging its UPGo app to decrease the time it takes truck drivers to drop off and pick up intermodal containers; and using drayage capacity through its LOUP subsidiary to help shippers.
BNSF on Oct. 22 announced it was extending its weekend incentive program to boost additional in-gate activity at its Los Angeles Hobart and Commerce Intermodal facilities. Through the remainder of 2021, the railroad is offering a $50 in-gate incentive for ocean containers that in-gate on a Saturday or Sunday at either facility above a set threshold. “These thresholds will be unique for each carrier, based on historic in-gate patterns,” BNSF reported.
Among BNSF’s other measures to boost capacity, improve rail performance and position its network to handle more volume: process improvements and collaboration with carrier partners and BCOs (beneficial cargo owners) to improve throughput at inland hubs and reduce the backlog of trains holding in Chicago and Memphis, Tenn.; the reopening of its Harvard Intermodal Facility in the Memphis market for certain international intermodal freight; streamlined train loading and unloading processes through collaboration with carrier partners; and enhanced APIs (application programming interfaces) to provide dray carriers with real-time data on shipments.
Both recent UP and BNSF actions aim to support the ports of Los Angeles and Long Beach’s Accelerate Cargo initiative, a move to 24/7 operations.
The San Pedro Bay ports on Oct. 25 reported they would assess a surcharge to ocean carriers for import containers that dwell on marine terminals. Ocean carriers will be charged for every container that is scheduled to move by truck and dwells nine days or more, or by rail and dwells three days or more. Beginning Nov. 1, the ports will charge $100 per container, increasing in $100 increments per container per day, they said.
The ports of Los Angeles and Long Beach will re-invest the fees collected from dwelling cargo in “programs designed to enhance efficiency, accelerate cargo velocity, and address congestion impacts throughout the San Pedro Bay,” according to the two ports.
The new policy was developed in coordination with the Biden-Harris Supply Chain Disruptions Task Force, U.S. Department of Transportation, and multiple supply chain stakeholders.
“Before the pandemic-induced import surge began in mid-2020, on average, containers for local delivery sat on container terminals under four days, while containers destined for trains dwelled less than two days,” the ports of Los Angeles and Long Beach said. “Those numbers have increased significantly, making it difficult to clear cargo off the terminals and bring in ships at anchor.”
“If we can clear this idling cargo, we’ll have much more space on our terminals to accept empties, handle exports and improve fluidity for the wide range of cargo owners who utilize our ports,” Port of Los Angeles Executive Director Gene Seroka said.
“The terminals are running out of space, and this will make room for the containers sitting on those ships at anchor,” Port of Long Beach Executive Director Mario Cordero said.
“As our economy continues to grow, increased demand and disruptions caused by the pandemic are putting our supply chains to the test,” said John D. Porcari, Port Envoy to the Biden-Harris Supply Chain Disruptions Task Force. “While we’ve seen new records set in terms of throughput this year at West Coast ports, we need more players throughout the supply chain to keep stepping up. The federal government will continue bring together private companies and stakeholders from across the supply chain and serve as an honest broker helping to surface solutions like this to address supply chain disruptions.”
For more on the 2020-21 supply chain crisis, read “Mediocre Performance—While Expecting Superior Results?” by Railway Age Contributing Editor Jim Blaze.