Inland container traffic in the United States has been overwhelmed and several rail operators have taken enforcement action, MSC warned

U.S. freight railroads have begun reducing rail traffic at ports such as Los Angeles, Long Beach and New York to relieve severe congestion at inland intermodal hubs and clear a huge backlog of containers as the nation imports record volumes.

On July 18 Union Pacific, the country's largest rail operator, suspended shipments of containers from west Coast ports (Los Angeles/Long Beach, Oakland, Seattle and Tacoma) inland, particularly to Chicago, for seven days.

Chicago, the largest rail hub in the US, has been at the centre of the network's spreading congestion. There are reports of containers sitting in Chicago for six or seven weeks.

Union Pacific's UP move is a high-profile effort by railroads to deal with congestion, and comes as other tier 1 U.S. railroads have taken drastic measures.

This month, Norfolk Southern (NS), a class I rail company serving the EAST Coast of the United States, will receive significantly fewer containers on its four busy lines due to chassis shortages and strong demand. This follows an announcement by NS at the end of June to cut 24 lanes of emergency services.

CSX Transportation, another Tier 1 rail company, cut the number of slots it booked from Bedford to Chicago. In addition, BNSF has set an allocation cap on capacity.

Starting last Sunday and over the next two weeks, BNSF, MSC's rail provider, will be metizing incoming trains at the Los Angeles and Long Beach terminals, carrier MSC said in a service advisory on Monday.

As a result, cargo will remain at the port until restrictions are lifted or "weakened," MSC said, and shipments to Chicago or unloaded from ships will be affected.

"Given these challenging circumstances, changing destinations can be difficult," says MSC. It added that BNSF did not place these restrictions at the ports of Oakland and Tacoma.

MSC also noted that since Sunday, an unnamed MSC rail operator has begun metering volumes from New York to three Midwestern destinations: Chicago, Cleveland and Indianapolis.

"These temporary measures are likely to be extended to other rail operators if the current situation does not improve," MSC said.

One reflection of America's overburdened rail network is a sharp increase in the number of imported containers moving from the West Coast to the Midwest. Trucking is also tight, with shippers reporting supply embargoes, restrictions and surcharges to control capacity, which are common in the parcel and LCL industries.

However, the Pacific Merchant Shipping Association (PMSA), which represents shipping lines and Marine terminals on the U.S. West Coast, expressed concern over the suspension. PMSA said the suspension plan would add to the current backlog of cargo at the docks, which would cause rail cargo to continue to dock at the docks, exacerbating congestion.

Now, inland problems are returning to the port, reversing its efforts to boost productivity and ease congestion.

At the Ports of Los Angeles/Long Beach, container stay times and truck turnaround times worsened in the latest statistics for May and June. The number of ships moored has increased, from 18 earlier last week, although the Port of Los Angeles now has 15 container ships a day, compared with 10 a day before COVID-19.

Imports, meanwhile, remain strong. Data from the National Retail Federation showed that imports were up 19 percent from June 2019. The group expects imports to continue climbing until mid-August and then gradually slow, but still at double-digit growth over 2019.

At a media conference last week, Port of Los Angeles CEO Gene Seroka noted that peak shipments early in the season have arrived and some retailers are moving ahead to avoid delays. He expects shipments to peak from August to October.

There is every indication that increased traffic will put pressure on infrastructure, leading to more delays and capacity bottlenecks.