Tag Archives: congestion

FedEx will sell space on empty container imports as a congestion-bypass service

And much more!

One thing that captured my attention in this nice article by Max Garland is the increasing use of 53 foot containers for imports to the US. This is a natural development, too long in coming as long as the US imports so much stuff. It saves the transloading step in SoCal once 40-foot containers get here; they can be moved immediately. A 53-foot container has 30% more cargo per truck move, and can be taken straight to a destination. No longer a reason to transload.

Another interesting point highlighted in the headline is FedEx’s offer to transport cargo in the new containers they are having built in China. I understand 53-foot containers are often being moved on refitted bulk ships rather than standard container ships which have slots for 40-foot containers. And these ships would move outside standard liner routes, which means they can choose where to drop off the containers. Perhaps they can go to ports that would avoid high congestion points. Often they are smaller as well, and take a shorter time to unload.

The article also discusses the jawboning that is taking place to get players in supply chains to move cargo quicker. Apparently the move toward 24-hour service in the supply chain has not gone too far, but some big players are already adopting the idea of it. Maybe the port terminals in LA and Long Beach won’t be able to do it, but the warehouses, trucking firms, and gate access points can, and even that will improve the flow of goods.

When people understand the whole problem and put their heads together, the congestion will abate. And they will figure out how to share the cost pain of doing so. It’s a lot more costly when you don’t have goods for sale on time.

Published Dec. 6, 2021

Max Garland Reporter

FedEx will sell space on empty container imports as a congestion-bypass service | Supply Chain Dive

STB chairman wants Norfolk Southern to explain deteriorating service

On the heels of a letter to CSX rail seeking explanations for poor service, the chair of the STB wants explanations from NSR. Why have rails in the East been letting their service level decline?

One explanation that’s been offered is a shortage of labor. While it’s true that rail labor is skilled and highly paid work, in the current situation there are plenty of people looking for better jobs. Rail offers those. And with unions to help, training should be available. So some effort should produce more workers, well trained. It doesn’t seem like a good explanation to me.

Perhaps the rail managements are thinking, “If everything else is congested, no one will notice if we have a little congestion too.” Another way to put it: lack of attention, and no desire to take action.

One interesting item in the article is the possibility of reciprocal switching in the US. Canada has had it for years, but the number of rails in Canada is smaller. The generic name for the practice is open switching.

The idea is that a shipper could take advantage of competition between rails if it were allowed to transfer shipments from one rail to another at specific locations where the rails met. There would be charges for the interchange to be sure, but the result might be a lower total cost of shipment.

There are significant hurdles to implement open switching. Workers have to be trained, and there would be multiple inspections required for safety and compatibility. And equipment would be needed to support interchange. Who would pay for it? These are bigger concerns in the US where there are six Class I rails, any pair of whom might be candidates for open switching practice at certain locations.

It’s not clear that allowing open switching or reciprocal switching as the STB calls it would really foster much competitive increase. However, there could be times, such as when there is severe congestion at an origin or destination, that open switching capability would save the day for many shippers.

It’s an example of meeting the need for resilience in our rail-using supply chains. I think the competitiveness aspect is fine, but the overall resilience is a much greater factor. It would put rails in a position to challenge trucking if switching could be done smoothly, even with charges.

Another view of reciprocal switching is presented in the final article below. It’s from the American Association of Railroads President, via Logistics Management magazine. He gives a positive view of rails’ contributions to the great supply chain jam-up of 2021, and talks more extensively about the ongoing discussion about reciprocal switching. It seems rails are not enthused about it.

Joanna Marsh Friday, November 26, 2021

STB chairman wants Norfolk Southern to explain deteriorating service – FreightWaves

Joanna Marsh Friday, October 1, 2021

No simple swap: Ins and outs of reciprocal switching on US railroads – FreightWaves

By Jeff Berman, Group News Editor · November 29, 2021

AAR President and CEO Jefferies addresses myriad topics at RailTrends – Logistics Management

Vessel charters get longer and more costly as carriers continue to hunt tonnage

Here are more examples of Non-Operating Owners chartering ships. And they are increasing in price. These carriers are outside the liner alliances, and allow the ships to move as they choose instead of following liner schedules. They can choose routes which avoid the major choke points in container handling we see now.

It’s another way to escape or try to escape the port congestion we see at major ports.

But there are increasingly signs that the congestion is spreading from the major ports such as LA and Long Beach to smaller ones such as Tacoma and even some East Coast US ports.

How do carriers escape the congestion then? At least with their own ships, not assigned to rotations, they can pick and choose. that flexibility may aid in winning contracts to shop goods.

By Mike Wackett 17/11/2021

Vessel charters get longer and more costly as carriers continue to hunt tonnage – The Loadstar