Spotlight
Rail container dwells swell in Southern California
Rail container backlogs are mounting at some marine terminals at the ports of Los Angeles and Long Beach amid a surge in imports from Asia that is driving a sharp increase in eastbound intermodal train movements and exacerbating a chronic deficit of railcars returning westbound . Yusen Terminals in Los Angeles is already holding twice its normal inventory of rail containers and is draying some of the boxes to a near-dock storage yard to prevent the backlog from interfering with cargo handling operations . “ The eastbound dwell has built up to the point that we have to use near-dock storage space — at an extra expense to us ,” said Alan McCorkle , Yusen ’ s president and CEO . Some terminal operators at the largest US port complex say while the railroads are providing sufficient rail cars to handle current eastbound intermodal traffic to the US interior , terminals are bumping up against their storage capacity and fear the facilities could become congested quickly if imports strengthen further in May and June . Union Pacific Railroad and BNSF Railway say they are not experiencing higher dwell times and that they will increase railcar supplies in Southern California in anticipation of the peak shipping season in the eastbound trans-Pacific that begins in August . The higher dwells come as imports from Asia landing at Los Angeles – Long Beach increased 29.7 % in the first quarter year over year to 1.96 million TEUs , according to PIERS , a Journal of Commerce sister company within S & P Global . The National Retail Federation , in its April 9 Global Port Tracker ( GPT ), forecast that US imports will continue to increase year over year each month at least through August , the end of its latest forecast period . The GPT forecast that imports will increase 6.8 % in May , 10.7 % in June , 5.5 % in July , 7.1 % in August , and 0.5 % in September on a year-over-year basis .
LA-LB rail container dwells rise steadily through Q1
Average number of days local- and rail-delivered containers spend at Los Angeles and Long Beach port terminals
Days
19
15
10
5
0 L Jul Jan 2023
Jul Jan 2024 ,
Local container dwell time
Source : Pacific Merchant Shipping Association
Rail container dwell time
© 2024 S & P Global
L
Martin Charles Hatch / Shutterstock . com
“ We believe there is something of a restocking going on because there was cautiousness last year in Europe that maybe the macro environment would not be so good ,” Clerc told analysts during the carrier ’ s first-quarter earnings call May 2 . Tight space on the ocean trade is also driving soaring air cargo demand . Data from the International Air Transport Association for March shows air freight demand on Europe – Middle East routes jumped 38.3 % compared with March 2023 .
Asia – Europe ocean space gets tight
Strong demand on the Asia – Europe trade is filling all available ocean capacity out of Asia as space constraints join the list of challenges facing the market that includes longer transit times , rising rate levels and Red Sea surcharges . “ All our named accounts are fully booked right now through May into June , and we hear from our customers that they expect the volumes to stay at high levels ,” Marc Meier , managing director for air and sea for Europe , Middle East and Africa at German forwarder Dachser , told a Journal of Commerce webinar in early May . In addition to cargo rollovers , Jochen Gutschmidt , senior advisor for inland supply chain and logistics at supermarket chain LIDL , told the webinar that the tightening space was also leading some carriers to cancel contracts , charge guaranteed space premiums and adjust volume allocations . According to data from Container Trades Statistics ( CTS ), total Asia – Europe volumes rose 9.6 % year over year to 2.5 million TEUs in the first quarter , while shipments from China to Europe jumped 12.4 % to 1.9 million TEUs .
Asia – Europe volumes rise for seventh straight month in March
Containerized imports to North Europe from Asia , with year-over-year change
TEU volume
900,000 120 %
800,000 000 |
100 % |
700,000 |
80 % |
600,000 |
60 % |
|
1,000,000
500,000
|
100 % |
40 % |
400,000 |
300,000 |
|
|
|
|
|
|
20 % |
|
226,667
200,000
20000
|
|
|
|
|
|
|
0 % |
100,000 |
|
|
|
|
|
|
-20% |
0 |
|
|
|
|
|
|
-40% |
|
Apr
L
|
Jul |
Oct |
Jan 2023 |
Apr |
Jul |
Oct |
Jan
Mar 2024 , 2024A
Apr
|
TEU Year-over-year % change
Source : Container Trades Statistics © 2024 S & P Global
Year-over-year % change
8 Journal of Commerce | May 20 , 2024 www . joc . com