Union Pacific is turning the corner on its standard reported service metrics, accelerating its intermodal trains while cutting dwell times, while BNSF was the intermodal volume leader last week, up 16.3% year-over-year. Intermodal tender rejections are down in both Los Angeles and Ontario, California. Those are healthy signals that inbound intermodal capacity constraints on the West Coast are starting to ease and that, while containers may sit waiting for processing at the ports and drayage might be expensive, at least the railroads are restoring fluidity to their intermodal networks.
But now capacity and container availability issues have spread to the middle of the country. We’ve seen reports suggesting that steamship lines are pulling empty containers back to the West Coast and Asia before U.S. exporters can fill them with goods. A host of fundamental data also indicates that interior markets are having the most trouble: Terminal dwell times are at YTD highs in Dallas and near YTD highs in Chicago. Tender rejection rates in Chicago and Joliet, Illinois, are among the highest in the country.
Modest relief on the West Coast has not been enough to pull down the average intermodal spot rate, which reached a new 2020 high last week at $2.48/mile.
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