Port of Los Angeles’ Executive Director, Gene Seroka, has warned of major risk to the U.S. supply chain if rail service is not improved. The pileup of containers at Southern California terminal yards sitting for nine days or more is now higher due to the lack of rail service to handle import cargo. “All eyes are focused on improving the rail product. Full stop. The bottom line is that we must take action on this issue immediately to avoid a nationwide logjam,” Seroka warned.
Los Angeles reported the highest-performing June on record. Year-on-year (y/y/), it was up less than 1% but compared to the prior five-year average for the same month, volumes were up 15%. Imports were down -5% y/y but up 12% from the five-year average. Compared to May, June imports were down by -11% however, ships with a total capacity of 91,664 TEUs were waiting in Los Angeles’ offshore queue at the end of June (see Figure 1).
Asked during the press conference whether the decline in June imports versus May was due to rail issues that limited terminals’ capacities and their ability to unload ships faster, Seroka replied, “If we’re not moving in sync, we’ve got to handle containers more than once and that takes time and money and it takes efficiencies out of the system. So, if we have these 20,000 aging rail containers [dwelling nine days or more] on the ground, sure, it causes problems.”
Seroka said that current conditions for terminal congestion are “nowhere near the inundation of containers on these terminals in the fourth quarter [of 2021].” He emphasized that the long-dwelling containers are mostly bound for rail transport, which was not the case in Q4 2021. “The rail cargo sitting nine days or longer now makes up 75% of all our aging cargo, which is why I’m advocating that we need to kick it into gear to get this problem solved. Everyone has a role to play. Cargo owners must pick up their boxes at inland rail terminals faster than they are today. The railroads need to get crews and engine power and rail cars back to the West Coast faster. And the marine terminals, shipping lines, and ports need to provide key data to help prioritize the evacuation of this cargo.”
Seroka expects peak season to be a strong but ‘tapered’ version of last year. “The volume you’re seeing coming through right now was ordered about three or four months ago. The cargo that’s going to come over during the next couple of months is going to look different,” he said.
Source: American Shipper
