Competitive Shipping Roundup: Inland container rail ramp congestion squeezes trucking availability

Compiled by Bruce Abbe, SSGA Strategic Adviser for Trade and Transportation 

Trucking congestion at key inland rail container ramps is now perhaps the largest impediment to moving more container freight overseas for U.S. exporters. The latest bottlenecks in the chaotic global container shipping supply chains have been moving inland as the import surge continues, with the fall peak season on the horizon. 

“U.S. drayage drivers quitting as rail ramp congestion crimps pay” the title of a report last week in the Journal of Commerce (JOC). Despite increases in rates and driver pay from trucking companies, “drayage providers in Chicago, Cleveland, Columbus, Dallas, Kansas City and Memphis have seen as much as one-quarter of their drivers quit because of their decline in income,” JOC reported.    

That bears out exactly what Specialty Soya and Grain Alliance has been hearing of late from several of its exporter shipper members.   

“Members tell us they are facing ever more difficulty finding trucking. Some tell us they’ve lost regular, dependable dray drivers because they are shifting to hauling other freight,” said Bruce Abbe, SSGA advisor for transportation and trade. “If you have a good driver hang on to him or her.” 

Drivers report its common now to have to wait in lines two hours to pick up or ingate a container – even up to six hours – at key Chicago yards including BNSF Logistics Park and UP Global IV. Trucking is hard to come by at Kansas City and elsewhere due to chassis shortages as well. Container dray drivers get paid by the trip, and the congestion delays have reduced the number of trips drivers can make in a day. 

CN gains upper hand in tug-of-war for Kansas City Southern 

Although it’s not final, Canadian National (CN) railroad seems to have moved ahead of its Canadian competitor Canadian Pacific (CP) railroad in the competition to acquire Kansas City Southern (KCS) railroad. The KCS board on May 21 determined a revised offer from CN was a “company superior proposal” and signaled its intent to move forward with the CN merger agreement.  

The Class One railroad merger still needs to run the course under U.S. Surface Transportation Board proceedings, and CP may continue to press it’s earlier offer that was initially accepted by KCS. 

 Go here for more details from Railway Age. 

‘Relentless online boom’ continues to disrupt global shipping  

If there is any doubt the current surge in container shipping demand, driving rates ever higher and reliability of service ever lower is a global crisis, a lengthy report in AsiaNikkei.com on May 19 should settle any doubt. 

“This is uncharted territory in terms of carrier profits – in terms of freight rates, in terms of just the level of disruption that the supply chain is seeing,” Simon Heaney, Drewry’s Long-based senior manager for container research said in the report, an interesting read about the scale and diverse impact of the global container shipping crunch, from seafarers to freight forwarders to shippers. The disruption is at a level beyond anything Heaney has seen over a 20–year career.