Land Lines

By Lawrence Gross

The Pacific Merchant Shipping Association recently noted in their monthly West Coast Trade Report that rail dwell times in the Los Angeles – Long Beach complex had jumped in February , increasing to 6.3 days from 4.7 days in January amid a spike in imports to start the year .

Is this yet another case of the railroads not being prepared to meet the needs of the market , or should we be looking elsewhere for the root cause of the problem ?

In the accompanying chart , the Intermodal Association of North America ( IANA ) Equipment Type , Size and Ownership ( ETSO ) data looks at the international double-stack railcar flows into and out of the Southwest region — California , Arizona and Nevada — over the past 14 months . The number of ISO containers originating or terminating in Arizona and Nevada are negligible in this context . However , the California data includes traffic to and from

150 wells to 336 wells . The length of empty trains required went from 1.6 miles to an incredible 3.4 miles each and every day . This works out to be 105 miles worth of empties required over the month of January .

Even if the railroads received advanced notice from ocean carriers about the volume surge and attempted to pre-position equipment in response , they would have needed up to 105 miles of empty track for storage ; needless to say , that is a tremendous amount .

Further , while the railroads might have at least something of a fix on what ’ s going to be moving eastbound , they have no such visibility on westbound volumes . If , for example , there is an increase in export loads or empties out of the Midwest , they need to retain enough empty railcars in the area to accommodate it .

And although US imports from Asia jumped almost 40 % year over year in February after an

Elevated dwell times are not mainly a function of a lack of planning by the railroads , they are an inevitability .

Robert V Schwemmer / Shutterstock . com the Port of Oakland , so this is not purely a Los Angeles – Long Beach comparison .

By looking at the number of revenue movements of 20- , 40- and 45-foot ISO containers into and out of the region and calculating the number of 40-foot double-stack wells needed to handle the volume , several messages emerge .

The first is no surprise : volume has been rising significantly since January 2023 . The second is that there is a chronic deficit in railcars that needs to be filled . On average , each day , 190 more double-stack wells move out of the region loaded than come back loaded with containers , either empty or containing cargo .

That ’ s almost two miles of empty equipment that needs to be found , transported and then distributed into the multitude of intermodal terminals in the region .

However , that is not the entire issue . Adding to the problem is volatility . From November to January , the daily deficit ballooned from

18 % jump in January , what happened in January wasn ’ t unique . From August to September of last year , the daily well car deficit jumped from 103 to 430 . The railroads had to position an additional 3.25 miles of empty equipment each calendar day in September .

No control over volume

Keep in mind that all this traffic is generally moving under long-term fixed-rate contracts between the railroads and the ocean carriers , which control the inland point intermodal ( IPI ) flows . In such instances , the railroads are required to absorb most of the cost of these massive , long-haul empty moves .

A key difference between the railroads and the other players in the intermodal supply chain is that the railroads have no control over their volume . They don ’ t get a chance to say “ no .”

44 Journal of Commerce | April 22 , 2024 www . joc . com