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Container Drayage
Container Drayage
Gridlock approaches as US terminal congestion moves inland

According to Container News:

There are signs of a reduction in the backlog of ships waiting to get into major US ports, but chronic congestion is moving inland, threatening further headaches for carriers seeking to redress the global equipment imbalance, said online freight forwarder Flexport.

While the number of vessels waiting to dock in Los Angeles/Long Beach has dropped below 20 for five consecutive days, getting boxes in and out of the terminals is becoming one of the key bottlenecks according to Flexport’s trucking procurement manager, Adam Parish.

“Terminals have longer waiting times and this translates into fewer boxes being moved a day. Drivers used to be able to move seven-eight boxes a day. This is now maybe two-three and in some ports like Los Angeles drivers might move one or two in a typical day,” he said.

Parish said drayage carriers were reporting a 40% decrease in productivity on the US east coast ports. Drayage rates have spiked as it becomes more difficult to get boxes in and out of the country’s leading terminals.

“Ocean imports are up 15-20% and the US just doesn’t have the infrastructure to operate with that sort of growth,” said Parish.

As well as delays getting boxes into and out of the terminals, there is a widespread shortage of chassis with an average street dwell time of 17 days inland causing “chronic issues” at the ports and contributing to the ongoing issue of mounting demurrage fees being billed to shippers.

"Issues around unreasonable detention and demurrage continue to plague the trucking and shipping community,” said Weston LaBar, CEO of the Harbor Truckers Association. “Many of the challenges we have experienced for the last year continue to be an issue today and the bills keep piling up," he said. Last year delays in the ports of Los Angeles/Long Beach and New York/New Jersey cost shippers and freight forwarders US$150 million in demurrage fees.

Delays are expected to persist throughout May as the consequences of the Suez shutdown continue to be felt throughout the supply chain. “This level of delay means trucking equipment is as tight as ocean equipment. It’s getting close to gridlock,” said Parish.

Flexport’s senior associate for trade lane management, Rohit Kundurthi, said even the most optimistic scenario would see the tight supply being felt until Golden Week in October. Flexport is preparing for a “Tsunami” of cargo due to hit US ports in the next month.

The blockage of the Suez Canal resulted in liner capacity to US east coast and west coast ports being reduced by 16% to Los Angeles/Long Beach, 23% to Seattle and Vancouver, and 20% on the US east coast ports, but there has been no slowdown in demand from US consumers leading to a backlog of cargoes that needs to be delivered next month, said Kundurthi.

He added there were 3 million TEU of import cargoes moving to the US on all the main trade lanes in March, up 80% year-on-year. Imports from Asia to the US hit 1.7m TEU in the same month, compared to 1m TEU in March 2020.

The surge in volumes was placing strain on all inland transport modes as desperate shippers explored all options to get cargoes to their final destinations. Severe congestion and bottlenecks were being felt in supply chains to all the major cities, said Parish. “Rail transit times had increased 300%-400% in the last three-four weeks.”

Joanna Zhang, Flexport’s manager for Ocean Trade Lane Management transpacific eastbound said that there was little that can be done to alleviate the problems being felt for shippers other than tightening up on forecasting of volumes - to become a more reliable client for shipping lines - exploring the option of transloading containers between the different intermodal options and being open to using less than container loads as a way to ship urgent cargoes to destination.


LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.


By: Container News

May 3, 2021

LFS Awarded as One of The Financial Times The Americas’ Fastest Growing Companies 2021

Today, we have been recognized as part of The Financial Times list of The Americas’ Fastest Growing Companies 2021. This prestigious award is presented by The Financial Times and Statista Inc., the world-leading statistics portal and industry ranking provider.

The Americas’ Fastest Growing Companies is comprised of the enterprises that contribute most heavily to economic growth, which was announced today and can currently be viewed on the FT website.

Out of the millions of active companies in North and South America, only 500 firms were awarded in the list, and we are ecstatic to be recognized as one of FT’s inaugural list of The Americas’ Fastest Growing Companies 2021.

We want to congratulate our team and thank the growing number of customer who trust us with their logistics.



By: LFS Marketing

April 13, 2021

Intermodal rail savings versus trucking hit record highs

According to JOC.com:

The cost differential between intermodal rail and truckload shipping is greater than at any point since 2014, but shippers have largely been unable to capitalize on any potential savings because of inconsistent rail capacity in the first quarter, according to intermodal marketing company (IMC) executives who spoke to JOC.com.

Shortages of containers, chassis, terminal appointments, and draymen limited freight rail capacity in major intermodal markets such as Chicago, Dallas, Memphis, Jacksonville, and Kansas City at various points throughout the first three months of 2021. If it weren’t for those labor and equipment issues, an average shipper could have saved 33 percent on contract intermodal business and 28 percent on the spot market last month compared with trucking, according to the latest reading of the JOC Intermodal Savings Index.

Realizing those savings, however, requires patience. Rail dwell times on Norfolk Southern Railway have risen to between 12 and 24 days at the Port of New York and New Jersey, according to a chemical shipper. Railroads have reported a 32 percent increase year over year in the number of intermodal cars idling for more than 48 hours in the last six weeks compared with the same period in 2020, according to weekly filings with the US Surface Transportation Board.

NS, for example, reported 113 intermodal cars did not move for more than 48 hours between March and the second week of April 2020. This year, NS said 1,296 cars were idle during the same six-week period. Union Pacific Railroad reported an increase from 284 cars last year to 860 this year. BNSF Railway, meanwhile, had 5,293 cars idle during the period, 66 fewer cars than in the previous year.

At the same time, domestic intermodal volume is up 7.7 percent between June 2020 and February 2021 compared with the same nine months a year prior, according to the Intermodal Association of North America. Until February, domestic intermodal volume had risen on a year-over-year basis for eight consecutive months, and demand is likely to return to positive growth again in March thanks to more favorable comparisons during COVID-19 lockdowns that began in March 2020.

The railroads are in a difficult position; metering how many containers move per day causes boxes to idle longer in busier times, but running more trains could exacerbate the already overtaxed chassis and drayage network, the IMCs acknowledged.

Shippers that don’t want to wait have turned to longhaul drayage or one-way truckload, paying record-high spot market rates that are above $10,000 in some cases.

“We have so many potential opportunities based on low prices today, but it’s a struggle to find the capacity. We are consistently inconsistent on service,” said Rick LaGore, CEO of InTek Freight and Logistics.

Containers, appointments, and drivers are hard to get

Chad Schilleman, intermodal specialist with Watco Companies, an IMC, said draymen, chassis providers, IMCs, and railroads are doing the best they can in a tough situation. 

“We're seeing waves of available appointments, container availability, and dray power. It's just going in waves across the US, so some weeks you can find capacity, and the next week, nothing,” he said.

UP and CSX Transportation require appointments to bring in containers, but two IMC executives based on the West Coast who did not want to be identified said they were having difficulty securing appointments in Portland, Oregon; Lathrop, California; Chicago, and Seattle. 

CSX told JOC.com in January its reservation system is designed to “align terminal capacity with train capacity” and “to maintain a fluid network,” which is why appointments may be unavaiiable for a few days on high-volume lanes.

Finding railroad-owned 53-foot containers — known as UMAX and EMP boxes — has also been challenging, according to the two West Coast IMCs. Because it’s difficult to get an empty UMAX or EMP container directly from the railroad in Chicago, Los Angeles, Lathrop, Portland, and Seattle, both said they are street turning containers, a cumbersome and inefficient process. Street turning refers to reusing an empty container of one shipper for another shipper, rather than returning the box to the railroad, which often requires the IMC to arrange for a second truck to move the container from the first shipper to the second.

Even for shippers able to secure a container and an appointment, their cargo can’t get to the railyard without a drayage driver. Finding those drivers has become far more difficult of late, as a rise in truckload spot rates and a growing number of load posts for expensive longhaul drayage have trimmed the local driver pool, Schilleman said.

With turn times up in 16 out of 18 terminals in Chicago, according to the Illinois Trucking Association, drivers are getting fewer jobs done per day and placing a premium on price, according to draymen. They also have their choice of what jobs to accept because there is so much freight to deliver.

Equipment problems on key ramps

Draymen have reported equipment issues in Atlanta, CharlotteChicagoJacksonvilleMemphis, and Kansas City since late December, several of which were on the NS network. Some have been related to chassis shortages, while others have been related to malfunctioning cranes, which tend to happen during a polar vortex, snowstorm, or widespread power outage, all of which took place across the US during the first quarter.

In February, UP and BNSF had to ground containers in a number of cities because of a chassis shortage affecting both international and domestic loads. Chassis shortages frustrate drivers, who are paid per completed job rather than on a per-mile or hourly basis, and shippers, who are ultimately responsible for paying any rail demurrage (storage) penalties.

Chassis providers have said a combination of record volume and rail networks being hampered by severe winter storms in February have caused the equipment shortages in those cities.


LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.


By: LFS Marketing

April 13, 2021

NYC-N.J. Tunnel Plan Has ‘Sense of Urgency,’ Buttigieg Says

According to Transport topics:

The Biden administration is prioritizing the Gateway rail tunnel project between New York City and New Jersey with urgency because of its “national significance” to the economy, Transportation Secretary Pete Buttigieg told lawmakers.

“This is a regional issue, but one of national significance because if there were a failure in one of those tunnels, the entire U.S. economy would feel it,” Buttigieg told members of the House Transportation and Infrastructure Committee on March 25.

Buttigieg provided lawmakers with his first update of the project, stalled by former President Donald Trump who in 2018 threatened to shut down the government if a spending bill directed federal funding for the tunnel. Gateway was ineligible for federal taxpayer money, the Trump administration said, because New York and New Jersey hadn’t pledged enough cash.

Buttigieg said the Federal Rail Administration and Federal Transit Administration are working with New Jersey Transit and the Port Authority of New York and New Jersey, as well as with Amtrak and the Gateway Development Commission, on updates to a draft environmental impact statement issued in 2017.

The impact statement is “a big part of what needs to be completed in order to get there,” Buttigieg said. The process involves reviewing anything that might have changed since the draft was issued, and coordinating with other federal agencies such as the U.S. Army Corps of Engineers, as well as state agencies that might have jurisdiction, he said.

Angelo Roefaro, a spokesman for Senate Majority Leader Chuck Schumer, said Buttigieg has indicated to the New York Democrat that the environmental review will be approved in May.

The Transportation Department did not immediately respond to a request for comment on the timeline for approval of the Gateway environmental review.

The tunnel would carry Amtrak and New Jersey Transit commuter trains under the Hudson River. Amtrak said it will allow for twice as many trains to run under the Hudson River, including those that are part of its Northeast Corridor service that connects Boston, New York and Washington.

Buttigieg’s comments came in response to a question from Representative Albio Sires, a New Jersey Democrat. “I represent a district in New Jersey with a lot of old infrastructure,” he said. “We have two tunnels — two commuter tunnels that are over 100 years old.”

“During Superstorm Sandy, a lot of salt water got into these tunnels and now the salt water is eating the cement,” Sires said. “I’m concerned that if we don’t address this issue, it’s going to be catastrophic.”

The corridor serves a region that’s home to 17% of the U.S. population, is home to some 97 Fortune 500 company headquarters, and contributes 20% of the national gross domestic product, Sires said.

Buttigieg said the Biden administration is fully engaged on expediting the Gateway Project, but there’s much that needs to be done before any ground is broken.

“The FTA is working closely with project sponsors as it advances through the capital investment grant process prescribed in law, which is obviously an important part of the picture when it comes to funding,” Buttigieg said.

The Gateway Development Commission said in a statement after the hearing, “We applaud Secretary Buttigieg’s public commitment to the Gateway Program, particularly confirming that the Hudson Tunnel Project is a project ‘of national significance’ and setting a rapid timeline for completing the project’s environmental review.”

The commission said it is working with local and federal partners to complete the environmental review and improve the project’s grant rating “so we can start full construction and finally replace a 110-year-old one-track-in one-track-out, delay-prone tunnel with a 21st-century rail link between New York, New Jersey and the rest of the Northeast Corridor.”


LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.


By: LFS Marketing

March 29, 2021

World’s Other Major Shipping Pileup Is Still Clogging Trade

According to Transport topics:

Ship congestion outside the biggest U.S. gateway for Asian imports worsened from a week ago, highlighting a headwind facing American companies just as a pileup around the Suez Canal had threatened to tangle Europe’s supply chains.

A total of 26 containerships were anchored waiting to offload at the twin ports of Los Angeles and Long Beach, Calif., as of March 28, compared with 20 a week earlier though still below a peak of 40 in early February, according to officials who monitor marine traffic in San Pedro Bay. Another 20 are scheduled to arrive over the next three days, with 14 of those expected to drop anchor and join the queue.

The average wait for berth space was 7.9 days, compared with 7.7 days a week ago, according to the L.A. port. That figure had reached 8 days in February, which was about triple the average delay in November.

The bottleneck, which started to form in late October, has been tough to clear because of shortages of both equipment and labor needed to handle an unprecedented wave of imports. American companies are trying to pad inventories as consumers buy more goods online.

Combined, the L.A. and Long Beach ports handled 1.59 million inbound 20-foot containers in the first two months of 2021, up about 29% from the same span a year earlier. March is typically one of the slowest months for imports, but the steel boxes this year keep coming.

RELATEDFebruary Container Volume High at Most Ports

Meanwhile, disruptions may only worsen and container rates globally may stay elevated in coming weeks as the ocean freight market tries to smooth out a logjam involving about 450 ships around the Suez Canal, where a vessel had been blocking transit in both directions since March 23.

The ship, the Ever Given, was re-floated early March 29, though it wasn’t immediately clear how soon the waterway would reopen.


LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.


By: LFS Marketing

March 29, 2021

Borderlands: Kansas City Southern expands Mexico rail service

According to Freightwaves:

Kansas City Southern expands Mexico rail service

The proposed $29 billion merger between Canadian Pacific (NYSE: CP) and Kansas City Southern (NYSE: KSU) aims to capitalize on an expected increase in the flow of trade among the U.S., Canada and Mexico.

The merger would create the first company with a rail network spanning all three countries and enhance the facilitation of the movement of goods across the three nations. 

“The new competition we will inject into the North American transportation market cannot happen soon enough, as the new United States-Mexico-Canada Agreement (USMCA) trade agreement among these three countries makes the efficient integration of the continent’s supply chains more important than ever before,” Keith Creel, CP president and CEO, said in a statement announcing the proposed merger.

The proposed CP-KCS merger comes against the backdrop of Kansas City Southern’s $167 million investment in Mexico last year.

Kansas City Southern de México (KCSM), KCS’ Mexican operations, include railways serving northeastern and central Mexico as well as key port cities including Veracruz, Tampico and Lazaro Cardenas. 

One of KCS’ major projects was the completion of part of a 12.11-mile double-track line that connects Mexico’s port of Veracruz on the Gulf of Mexico.

KCSM ran the first revenue train over the new double-track access into the expanded Port of Veracruz in February, company spokeswoman Doniele Carlson told FreightWaves.

“This new rail infrastructure is anticipated to make the port more competitive and productive for imports from the U.S., South America and Europe,” Carlson said. “The project was completed in coordination with the Integral Port Administration of Veracruz (APIVER) to improve rail and ship asset utilization, efficiency and connectivity. Before the bypass, KCSM did not have direct access into the Port of Veracruz.”

The 12.11-mile rail connection starts at KCSM’s Santa Fe connection point in the state of Veracruz, which is already covered by the company’s rail network, and extends to the expanded Port of Veracruz.

The Mexican government invested over $19 million to build two new terminals at the Port of Veracruz last year. Veracruz is a key strategic point for trade on Mexico’s east coast as well as the largest seaport located near Mexico City.

“KCSM’s new rail connection is part of a large expansion carried out by the [Veracruz] port authority, including the construction of new intermodal, refined products, grain, automotive and general merchandise terminals,” Carlson said. “Direct access into the new terminal complex will allow KCSM to grow its business between central Mexico and the historically important port of Veracruz.”

Carlson said KCS will continue to focus on more capacity projects during 2021, including beginning construction on a second international rail bridge at the Laredo, Texas-Nuevo Laredo, Mexico, border crossing.

After dipping in late February from the winter storm, Laredo outbound domestic intermodal volume (ORAILDOM.LRD) have risen above year-ago levels.

(Chart: FreightWaves SONAR. Using a seven-day moving average, domestic loaded intermodal container volume outbound from Laredo is shown for 2021, 2020 and 2019 in blue, green and orange, respectively.)

KCS’ route through Laredo connects to Mexico City as well as the ports Veracruz, Tampico and Lazaro Cardenas. 

“Today, KCS processes an average of 26 trains in a 24-hour period. Adding the second bridge will enable the Laredo gateway to accommodate 65 to 80 trains per day,” Carlson said. “KCS continues working with relevant government entities on permitting while doing preliminary design work toward a second cross-border bridge at Laredo.”

Furniture maker expands in Laredo

Palliser Furniture Upholstery Ltd. recently leased 117,191 square feet of manufacturing and logistics space at the Sophia Industrial Park in Laredo, Texas. 

“We simply outgrew our old location. We were spread out amongst multiple buildings and this move allows us to merge our facilities into a single location in Laredo,” Mike Hofmann, COO of Palliser, said in a release.