Port of Los Angeles freight rail delays
reach two-year high, with holiday and
everyday items piling up
From: CNBC.com
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Key Points
- Almost half of the containers bound by freight rail out of the Port of Los Angeles are waiting nine-plus days to get out of the port and onto the rail.
- Record September imports driven by the recent East Coast and Gulf Coast strike diversions and ongoing Red Sea issues have clogged up container rail yards at the nation’s busiest ports.
- Dwell times, or how long containers sit at ports, have spiked to a two-year high at Los Angeles and Long Beach, though port officials say operations continue to run efficiently.
Record imports over the last several months at West Coast ports, driven by the recent East Coast and Gulf Coast strike diversions and ongoing Red Sea issues, are leading to congestion on the rails, as holiday goods and everyday items pile up.
Almost half of the containers bound by freight rail out of the Port of Los Angeles are waiting nine-plus days to get out of the port and onto the rail.
Before the August and September container surges, the average rail dwell time, or how long a container sits at port, for the San Pedro Basin, which includes the Port of LA and Long Beach, was four days.
In September, the Port of Los Angeles moved a total of 954,706 twenty-foot equivalent units, or TEUs, making the month its best September ever. At the port’s monthly cargo briefing Friday, Executive Director Gene Seroka told CNBC there are currently 20,000 rail containers sitting at the port waiting to be loaded out, and he is speaking with the railroads on a daily basis about the increased dwell times.
But he stressed that the rail congestion is not leading to any additional issues at the port as far as vessel and trucking operations. “This is not impacting port operations,” said Seroka. “We want to make sure we improve on all port operations. The railroads continue to be our focal point.”
Seroka said he is monitoring three key factors related to future container growth and port ability to move all of the cargo efficiently: early Lunar New Year, the U.S. presidential election, and the strength of the economy, which currently continues to look strong based on the recent port volume data.
“October is shaping up to be another strong month,” Seroka said. “We see no precipitous signs of a pullback. We are looking at the mid-800-thousand [TEU] range. We have an early Lunar New Year. With tariffs, we may see an uptick of cargo in early to avoid those extra costs depending on the presidential outcome, and unemployment claims are down.”
Republican presidential candidate former President Donald Trump has continued to talk aggressively about new trade tariffs if he wins the election.
At the Port of Long Beach, the rail dwell times for containers are seven days, but the port is not experiencing congestion, Executive Director Mario Cordero told CNBC.
“Given our historic number of TEUs moving through [the Port of Long Beach] for the last three months, the current rail dwell is not of immediate concern,” Cordero said. “Port of Long Beach is not experiencing any congestion or bottlenecks, our operations are fluid. We are in a good position to receive continued record cargo given our current capacity.”
Cordero said there has been an increase of approximately 26% in on-dock rail movement.