So far it's unfolding exactly as expected (and btw, the export volume is down 28%):
Union Pacific and BNSF intentionally cut rail volumes from Southern California last month to reduce pressure in Chicago, impacting about 15% of the port’s volumes. “Dwell times on rail have increased because of this but containers had no place to go,” said Seroka, who believes the railroads had no choice but to throttle volumes.
“Let me sum it up this way: Warehouses are overflowing. Rail yards and carriage are maxed out. Chassis and containers continue to be hard to come by. Ships are coming in and waiting at anchor to get worked. And factories are behind in orders, even though output is at record levels.”
Risk to Christmas salesIf the trans-Pacific shipping system maxes out soon, some Christmas retail sales could be at risk.
When asked about holiday demand, Seroka explained, “We’ve seen an early pivot to peak season by the import community to make sure they take into account these knots in the supply chain and the overall transit time they need to get the products in. The import community is going to have to digest this surge in cargo at an even faster rate than they’ve shown a propensity to do before.
“As for American consumers, they should take a look online early and go to their favorite retail stores in the neighborhood a little bit earlier than normal with their list for the year-end and Christmas holidays,” he advised.
“Everybody’s going all out to try to make sure that we meet these important milestones,” Seroka said. “This incredible sustained demand has everyone pushing at top speed, yet we still have much more work to do.” |
