Land Lines

Railcar imbalance accelerates in Southwest region

The number of international double-stack railcar flows into and out of the US Southwest region over the past 14 months

2,000 1,914

1,500 1,000 1,000

500

Source : IANA ETSO database

Out In Net Surplus / Deficit ( Rhaxis )

-100 -102

-200 -500

-300

-400

-500

Compare this to the ocean carriers . If there is a surge of export volumes in Asia , the ocean carriers don ’ t have to add ships to the rotation ; they can simply roll excess cargo to the next voyage with available capacity .

0

© 2024 S & P Global

L

Ocean carriers also control to what degree they use IPI and the relative pricing of moving containers through the West and East coasts . They make these decisions based purely on optimizing their internal economics . The downstream effects are not generally a factor .

This was most evident during the height of the pandemic surge , when IPI virtually disappeared because carriers didn ’ t want to waste time moving containers inland when there was a high-revenue load waiting in Asia . The container lines turned the boxes on the West Coast , leaving shippers to figure out how to get their freight inland .

The impact on the railroads was devastating . Loaded TEUs arriving in California during the first quarter of 2022 ticked up 3 % from the same period in 2021 , but ISO containers emerging from the Southwest region by rail plummeted 26 % during the same period .

Now , a different reality prevails , and with plenty of container capacity in hand , IPI is suddenly back in favor . Given the whipsaw effects of these dramatic changes , elevated dwell times are not mainly a function of a lack of planning on the part of the railroads . They are an inevitability , and shippers need to take this into account in their planning processes .

email : lgross @ intermodalindepth . com

From the pages of our magazine to the conference stage , Breakbulk & Project Cargo reaches the leaders of the specialized sector .

– Magazine – E-newsletters – Online at joc . com – Webcasts & Events

36449 www . joc . com April 22 , 2024 | Journal of Commerce 45