UP temporarily stopping eastbound container service to Chicago

“This week we reached out to the ocean carriers to take more positive steps to improve fluidity and throughput in the Los Angeles Basin and our Global IV facility in Chicago. … We believe this change will allow the transportation supply chain to begin working off the backlog of Global IV-destined trains while freeing up railcar assets to support import loading needs on the West Coast,” UP said in an advisory provided to FreightWaves. “We are working closely with the ocean carriers and collaborating wherever possible to improve the health of the supply chain.”

UP, along with other supply chain partners including Class I railroads, have been grappling with congestion at the West Coast ports as the economic recovery and robust e-commerce activity have kept U.S. import levels brisk. 

Container processing at Southern California port terminals has increased while UP’s rail shipments to and from the ports “are near record highs,” UP said.

FreightWaves SONAR shows that intermodal outbound tender rejections, or outbound intermodal tender transactions rejected in the last seven days, grew in June after dipping to lows in March through mid-May.

Some shippers have expressed concern anecdotally about how the supply chain will handle fall peak, especially amid reports that containers have been waiting to move to multiple destinations for weeks, if not months. The reasons given for the congestion at the ports have ranged from chassis and labor shortages to railcar shortages. 

UP said it recently held a symposium with ocean carriers in order to determine how to gate out boxes at inland terminals more quickly. From those efforts, UP has capped its storage fees at the Global IV facility for loaded units that are stacked and awaiting out-gate to help ocean carriers and drayage companies, and UP has opened its Global III facility as an interim import container storage location.

“We believe these positive steps will alleviate some of the considerable challenges supply chain participants are facing,” UP said.

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Related links:

• Mounting evidence that container crunch will persist until 2022

• US imports could stall as demand overwhelms trans-Pacific capacity

• FreightWaves Classics: Port of Chicago billed as the “greatest intermodal facility in North America”

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