OMAHA, Neb. – In the latest pandemic-related disruption, Union Pacific has told customers it will halt all shipments of international containers from West Coast ports to its Global IV terminal in Chicago for up to a week.
The embargo, scheduled to begin on Sunday night, will help the railroad clear a container backlog at Global IV. The terminal is clogged largely due to reasons beyond the railroad’s control. Labor shortages and pandemic-related restrictions have slowed unloading and loading of containers at customer facilities. That has led to a shortage of chassis and drayage capacity during a period of high demand.
Other railroads, including BNSF Railway and Norfolk Southern, also have taken steps at various times this year to limit inbound volume at congested terminals in Memphis, Chicago, and elsewhere on their systems.
Intermodal analyst Larry Gross says UP’s move will create massive backups at West Coast ports, which are already busy as retailers are looking to keep up with consumer demand and aim to restock depleted inventories at their warehouses and store shelves.
As many as 40,000 twenty-foot equivalent units — or TEUs, the standard measure of international containers — will be stuck at West Coast ports over the next week due to the UP embargo, Gross says. That’s equivalent to 50 double-stack trains, each with 200 wells and a capacity for 800 TEU.
“The biggest issue seems to be a shortage of pool chassis to support normal operations at this wheeled terminal,” Gross says of the congestion at Global IV. “But I’m told that if a drayman shows up at Global IV with their own chassis to pick up a grounded box, they can’t get the box loaded.”
In a service advisory issued today, steamship line HMM told customers to expect delays to containers that are on ships or already on docks at West Coast ports. “There will be some restrictions on new bookings from Asia to Chicago destinations in order to clean up any already in-transit cargoes,” the HMM advisory says.
“As the U.S. intermodal supply chain continues to be stressed with U.S. West Coast terminal congestion, we will continue to closely monitor the circumstances of other inland rail ramps, as well,” HMM says.
UP, in a service advisory two weeks ago, adjusted its container storage charges amid parking congestion at the terminal.
“The international intermodal supply chain continues to experience congestion related to high demand and constrained capacity, particularly drayage and warehouse operations in major markets,” UP said in a July 1 advisory. “Union Pacific has strived to maximize container shipments between ports and inland ramps, but available parking space at Chicago’s Global 4 ramp has been consumed due to slow outbound drayage processing.”
9 thoughts on “Union Pacific suspends inbound international container shipments to Chicago for a week”
With imports surging, lack of storage area for containers at ports, intermodal yards closed or cut back, shortages of tables, locomotives in storage, vast numbers of employees furloughed/terminated, major routes holding numerous trains not moving, fires and flooding closing key corridors, all lead to a fiasco of a mess. And that wonderful thing called PSR is responsible for a big chunk of all these issues. This won’t clear up anytime soon. You know, the rails will hopefully learn that excess capacity is a good thing. But probably not.
There is more to this than capacity. Maybe we have cut capacity too much? And, how much is the closure of Canadian Transcon contributing. I hope they can clear it up, otherwise steamships will just move them to the east coast on an all water route. But then the problem gets moved around without solving anything. Bet UP wishes it could use some of their stored locomotives.
Gotta love the shortage of man power with over 100 people in fourloud status in the Chicago Service Unit.
UP closed Global 1 and promised that service wouldn’t skip a beat. “Union Pacific has worked to further simplify our Chicago intermodal operations. In early 2019, we took an end-to-end look at our intermodal network to find ways to optimize the supply chain. The final key change in that plan is to close our Global 1 terminal and consolidate those operations…Our intent over the next 60 days is to shift train pairs from Global 1 … in a thoughtful manner.
Seems UP can use all the space it can. Savings>>>Service.
My comment wasn’t “bitching” about the UP.
I’ll bet they wish the could handle it. Sure they are “all” having the same problems but they had the best motto.
Before we start bitching about the UP, I would read paragraphs two and three in the above article.
The new motto for the UP.
“We wish we could handle it”
Ahhh PSR at its very best! A golden opportunity for BNSF?